Europe Declines on Profit-Taking

Ivaylo
08 May, 2007
New York City

European markets fell on Tuesday as investors took profits from recent strong gains. Royal KPN reported earnings that missed analysts estimates and chemical maker Clariant profit dropped on higher energy costs. By mid morning, Frankfurt Xetra Dax shed 0.5%, the CAC 40 in Paris lost 0.4% and London FTSE 100 fell 0.4%.

[R]6:30AM European markets fall on Tuesday on profit-taking, weak earnings.[/R]
European markets declined on Tuesday. By mid morning, Frankfurt Xetra Dax shed 0.5% to 7,490.63, the CAC 40 in Paris lost 0.4% to 6,047.72 and London FTSE 100 fell 0.4% to 6,578.7. National benchmarks fell in all 17 markets in western Europe that were open except for Denmark.

Decliners

Shares of KPN dropped 2.6%. The company reported that net income fell 18 % to 313 million euros on sales of 2.92 billion euros, down from 3 billion euros a year earlier. KPN had been estimated to report net income of 351 million euros. Sales had been projected at 2.98 billion euros.

Clariant, specialty chemical maker, fell 2%. First-quarter profit slid 10% to 86 million francs or $71 million on increased energy and raw material costs.

Swiss Re lost 1.6%. Premium income increased 23%. That fell short of the 8.56 billion-franc median estimate. Net income rose 54% to 1.33 billion Swiss francs, compared with a 1.3 billion-franc prediction.

Advancers

Reuters Group climbed 4.4%. Thomson is in talks to buy Reuters for 8.77 billion pounds, or $17.5 billion, to gain a global news service.

Shares of William Morrison jumped 3.4% after reports that the fourth-biggest U.K. supermarket company may soon get a 9 billion-pound bid from private equity firms or property specialists.

Commodities

Crude oil rose the most in more than a week after a militant group attacked pipelines in Nigeria, Africa biggest crude producer. Crude oil for June delivery was up 13 cents at $61.60 a barrel on the New York Mercantile Exchange in early trading in London. The contract had advanced as much as 43 cents or 0.7% to $61.90, the biggest gain since April. 27. Brent crude oil for June settlement rose as much as 86 cents, or 1.3 %, to $65.30 a barrel on London ICE Futures exchange.

Platinum for immediate delivery dropped $9.50 to $1,331.50 an ounce, after gaining $55, or 4.3%, since April 30. Palladium rose 50 cents to $377.50 an ounce, the fifth straight gain. Gold fell as a rebound in the dollar against the euro may erode investor demand for precious metals as an alternative investment. Gold dropped $2.45, or 0.4%, to $686.30 an ounce, while silver fell 3 cents to $13.475 an ounce.

Cuurencies

The dollar was mixed against other major currencies in European trading Tuesday morning. The euro traded at $1.3575, down from $1.3603 late Monday in New York. The British pound traded at $1.9935, up from $1.9931. The dollar fetched 119.90 Japanese yen, down from 120.11.

[R]5:00AM Platinum soars Monday, gold and silver advance, copper declines.[/R]
July platinum surged $22.10 to end at $1,350.90 an ounce on the New York Mercantile Exchange, while June palladium settled up $2.20 at $379.20 an ounce. June gold ended up 70 cents at $690.40 a troy ounce and July silver added 11 cents to finish at $13.64. The most-active July copper contract fell 4.30 cents to settle at $3.7155 per pound.

June crude oil futures lost 46 cents to close at $61.47 a barrel. June heating oil settled down 2.80 cents at $1.8029 a gallon, while June gasoline futures closed down 2.68 cents at $2.1896 a gallon, after trading at $2.2135. June natural gas declined 15.9 cents to end at $7.779 per million British thermal units.

On the New York Board of Trade, Arabica coffee futures for May delivery closed down 1.10 cents at $1.0190 a pound, with July off 1.20 cents at $1.0480. Most-active July cocoa was unchanged from settlement on Friday at $1,873 a metric ton. Futures on raw sugar in foreign ports for July dipped 0.02 cent to finish at 9.32 cents a pound, with October off 0.02 cent at 9.61 cents. May corn ended 11.75 cents lower to $3.6950 per bushel