Spain in Recession; adidas, Anheuser-Busch Up on Earnings

Arthi Gupta
30 Apr, 2012
New York City

The European market indexes traded directionless as many stayed away for a long weekend. Spain slipped back into a double-dip recession after the economy contracted in the first quarter. adidas raised its fiscal 2012 outlook after strong quarterly performance.

[R]1:00 PM Frankfurt – The European market indexes traded directionless as many stayed away for a long weekend. Spain slipped back into a double-dip recession after the economy contracted in the first quarter. adidas raised its fiscal 2012 outlook after strong quarterly performance.[/R]

The European indexes traded sideways as many stayed away for the long weekend as the Continent observes May Day tomorrow.

The latest data from Spain confirmed the decline in economic activities for the second quarter in a row as construction industry slump and the latest government spending cuts lift unemployment to a record high.

Standard and Poor''s downgraded 16 Spanish banks including Banco Santander S.A., its core subsidiary Banco Español de Credito S.A., and Banco Bilbao Vizcaya Argentaria S.A.

Market barely budged after the release of the GDP data from Spain and bond yields were nearly unchanged in Spain and in Italy. The latest contraction was less than estimated by the Bank of Spain last week but still investors stayed on the sidelines for most of the morning trading.

On the earnings front, adidas and Anheuser-Busch quarterly earnings gained and were ahead of expectations.

Actelion surged 18% after its drug macitentan, intended to treat pulmonary arterial hypertension met primary endpoint in a pivotal phase 3 study.

In Paris trading, the CAC-40 Index declined 26.86 or 0.8% to 3,239.41 and in Frankfurt the DAX Index edged higher 4.35 or 0.1% to 6,806.04.

The yield on Spain’s benchmark 10 year bonds was at 5.87% and the Italian bond yields declined two basis points to 5.62%.

Euro-zone Inflation Eases

Euro-zone annual inflation eased to 2.6% in April from 2.7% in March, flash estimate issued by Eurostat showed today.

The statistics office is slated to publish final data on May 16.

Spain Economy Contracts

The Spanish gross domestic product contracted 0.3% in the first quarter, following a 0.3% drop in the fourth quarter of 2011, the statistics office Ine said today. The latest slump in economic activity was led by a decline in domestic demand, according to the statistics office.

However, the latest result was better than the 0.4% decline estimated by the Bank of Spain last week.

German Retail Sales Recover

Seasonally adjusted retail sales in Germany rose 0.8% from a month ago in real terms in March, following a 0.9% fall in February, the latest data from the Federal Statistics Office showed.

Gainers & Losers

Actelion Ltd. soared 18% to Sfr39.87 after the Swiss biopharmaceutical firm said its hypertension drug macitentan met primary goals in pivotal study.

adidas AG surged 5.6% to €63.20 after the German sports goods maker said first quarter group revenues increased 17% to €3.8 billion. Net income in the quarter increased 38% to €289 million.

Anheuser-Busch InBev NV fell 2.4% to €53.79 after the brewer reported first quarter revenue climbed 3.7% to $9.33 billion from $9 billion in the prior year. Profit for the quarter soared 75.3% to $1.69 billion from $964 million in the prior year.