Home Depot Weighs on Europe

Ivaylo
10 Jul, 2007
New York City

European markets declined for the first time in three days on Tuesday after Home Depot cut its profit guidance, raising concern the U.S. housing market is weighing on the economy. Foodmakers limited the decline, though, as Groupe Danone offered to buy Royal Numico for $16.8 billion, rekindling takeover speculation in the industry. By region, the U.K. FTSE 100 shed 0.2%, the German DAX 30 lost 0.3% and the French CAC 40 dipped 0.3%.

[R]6:30AM European markets are lower Tuesday dragged by poor performance by Home Depot.[/R]

All three major bourses were lower on Tuesday.

In London, FTSE 100 shed 0.2% at 6,700.80. U.K. stocks fell, led by Antofagasta, Xstrata and BHP Billiton Ltd. as copper prices reversed earlier gains in Asia. BHP Billiton dropped 1.2%. Marks & Spencer Group limited declines after the company beat analysts estimates and advanced 2.9%. Next also advanced 1.3%. Unilever climbed 3.7% amid takeovers in the food industry. Wolseley slipped 2.3% after U.S.-based Home Depot lowered its profit forecast.

In Germany, DAX 30 lost 0.3% at 8,051.82. DaimlerChrysler gained 1.8% as UBS raised its price target to 90 euros from 75 euros and kept its buy rating. The broker suggested six ways to improve Daimler truck division, including a sale of its Japanese business Fuso and job reductions in Germany.

In France, the CAC 40 dipped 0.3% at 6,085.28. Carrefour declined 0.8% ahead of the release of the first-quarter revenue of the French supermarket chain, due out after the Paris close. In another development, Groupe Danone offered to buy Royal Numico $16.8 billion in cash to gain the biggest share of the baby-food market in Europe. Numico shot up 23.5%, while Danone lost 1%.

[R]5:30AM Gold, silver gain while corn finishes lower.[/R]

Gold kept clambering out of its late-June trough of $638 an ounce, with the August contract advancing $7.70 an ounce to end at $662.50 on the New York Mercantile Exchange, supported by the dollar which dipped against the euro.

Other precious metals tracked gold higher. September silver closed at $12.82, up 6.3 cents an ounce.

Copper prices gained as the London Metal Exchange released a large outflow of inventory and as workers at a major Chilean mine went on strike. Nymex September copper gained 3.5 cents to $3.6295 a pound.

In the energy market, oil sank under the pressure of hopes for a corresponding decline in demand for crude from the Whiting, Ind., refinery. The unit, closed for maintenance, processes about 250,000 barrels of crude daily. Crude for August delivery shed 62 cents to close at $72.19 a barrel on the Nymex..

Brent crude hit an 11-month high of $76.34 a barrel on ICE Futures in London.

Gasoline futures surged 3.5 cents to finish at $2.3446 a gallon.

December corn inched down 1.6 cents to settle at $3.502 a bushel on the Chicago Board of Trade. Wheat for September also pulled back 10.4 cents to $5.994 a bushel.

Meanwhile, soybean prices surged over the $9 mark for the first time since 2004. November soybeans added 6 cents to close at $9.02 a bushel.