Violent Protests in Greece; Euro Slides

Arthi Gupta, Mayank Mehta and Sanjay Barot
05 May, 2010
New York City

European market indexes declined for the second day on the growing contagion worries in the region. The euro dropped to one-year low. Euro area retail sales were unchanged in March. Lafarge posts profit on asset sale. Societe Generale SA reports better-than-expected earnings.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European market indexes declined for the second day on the growing contagion worries in the region. The euro dropped to one-year low. Euro area retail sales were unchanged in March. Lafarge posts profit on asset sale. Societe Generale SA reports better-than-expected earnings.[/R]

European stocks sank on increasing concern that government debt levels will stall the economic recovery. The euro plunged to $1.28, its lowest level since March 2009, as German Chancellor Angela Merkel warned of contagion if a €110 billion euro or $146.5 billion Greece rescue does not succeed.

European market indexes accelerated the slide in the last hour of trading with market indexes in Spain and leading the decline of more than 1.5%. The IBEX 35 index in Madrid dropped as much as 2.5%.

Rating agency Standard & Poor''s last week cut Greece''s credit rating to the junk level of BB+, lowered Spain by one level to AA and cut Portugal by two steps to A-

Portugal may have its credit rating cut by Moody’s Investors Service as the country struggles to reduce its budget deficit and revive economic growth a sign that contagion from the Greek crisis is spreading.

Moody’s today placed its Aa2 rating on review for a possible downgrade, a process that will conclude within three months, the company said in a statement.

Portugal’s PSI-20 Index plunged 1.9% as Moody’s Investors Service placed the country’s ratings on review for a possible downgrade.

Retail trade sales in March remained stable compared to February in the euro area and in the wider zone of 27 nations. Retail sales index fell 0.1% in the euro area and rose 0.3% in the EU27 compared to the month year ago.

Crude oil inventories at the end of last week increased 2.8 million barrels to 360.6 million barrels. Motor Gasoline inventories increased 1.2 million barrels and that of finished gasoline decreased and distillate increased by 0.6 million barrels.

Societe Generale SA reported a surge in fourth-quarter profit, helped by profits posted by its international retail banking and private banking businesses.

In London FTSE 100 Index closed lower 63.59 or 1.18% to 5,347.52, in Paris CAC 40 Index decreased 43.47 or 1.18% to close at 3,645.82, in Frankfurt DAX index lower 41.70 or 0.69% to close at 5,965.16. In Zurich trading SMI decreased 28.33 or 0.44% to close at 6,460.09.

Gainers & Losers

Anheuser-Busch InBev NV added 1.6% to €36.67 after the brewer said first quarter revenues rose 1.2% to $8.3 billion from $8.2 billion a year ago. Net profit for the quarter rose 14% to $891 million or $0.56 per diluted share compared to net profit of $783 million or $0.50 per share a year ago.

Bayerische Motoren Werke AG rose 1.2% to €36.27. The automobile manufacturer said first quarter revenues rose 8% to €12.4 billion from €11.5 billion a year ago. Net profit for the quarter was €323 million or €0.49 per diluted share compared to net loss of €153 million or €0.23 per share a year ago.

Bourbon SA, a company engaged in the field of maritime transportation fell 1.9% to €31.45.

CGG Veritas dropped 6.6% to €20.56 after the manufacturer of geophysical equipment said first quarter revenues fell 23% to €498.0 million from €648.5 million a year ago. Net loss for the quarter was €2.5 million or €0.2 per diluted share compared to net profit of €52.7 million or €0.35 per share a year ago.

Centrosolar Group AG closed unchanged at €4.30 after the company announced that for 2010, it is able to confirm the revenue expectations of €340 million to €370 million for the 2010 financial year.

Dyckerhoff AG closed unchanged at €42.50. The construction materials manufacturer said first quarter revenues fell 22% to €202 million from €258 million a year ago. Net loss for the quarter was €36 million compared to net loss of €26 million a year ago.

Henkel AG & Co, the maker of Loctite glues and Persil detergent dropped 3.9% to €38.08.

Iliad SA slipped 0.6% to €73.31.

Lafarge S.A decreased 4.7% to €50.35. The building materials company said first quarter sales fell 10% to €3.28 billion from €3.63 billion a year ago. Net profit for the quarter was €64 million or €0.22 per diluted share compared to net loss of €17 million or €0.08 per share a year ago.

Orpea SA, the commercial retirement-home operator fell 0.6% to €30.07.

Societe Generale SA rose 0.9% to €39.00 after the banking group said first quarter net banking income rose 35% to €6.6 billion from €4.9 billion a year ago. Net profit for the quarter was €1.06 billion compared to net loss of €278 million a year ago.

Swisscom AG, the telecommunication services provider said first quarter revenues rose 1% to CHF2.95 billion from CHF2.92 billion a year ago. Net profit for the quarter fell 19% to CHF394 million or CHF7.61 per diluted share compared to net profit of CHF484 million or CHF9.34 per share a year ago.

Symrise AG dropped 3.3% to €17.85 after the stock was downgraded to “hold” from “buy” at Citigroup.