BMW, Daimler Fall; ArcelorMittal Lay-offs

123jump.com Staff
03 Jun, 2009
New York City

The European benchmark indexes fell as global slump dragged market indexes. The U.S. private sector eliminated more than 530,000 jobs. ArcelorMittal may idle as much as 40% workers for as long as one year in Spain. Automakers in Germany fell after the weak sales in the U.S. last month.

[R]8:00 PM Frankfurt, Paris; 2:00 PM New York – The European benchmark indexes fell as global slump dragged market indexes. The U.S. private sector eliminated more than 530,000 jobs. ArcelorMittal may idle as much as 40% workers for as long as one year in Spain. Automakers in Germany fell after the weak sales in the U.S. last month.[/R]

The weakness in global markets was exacerbated after a weak employment report in the U.S. and worries that valuations have stretched too far after a rally that is now ten weeks old. The stocks in Europe, Asia closed lower and traded weak in the U.S.

In Paris, CAC 40 Index decreased 68.39 or 2.02% to close at 3,309.65 and in Frankfurt DAX index lower 89.53 or 1.74% to close at 5,054.53.

Gainers & Losers

ArcelorMittal declined 5.3% to 24.07 euros after the company and its Spanish labor union agree job cuts and staff idling. Under the agreement that required intervention of a Spanish court, the company may idle as much as 40% of 12,000 employee hours that may last till next June. The price of hot rolled steel has dropped 54% from the peak of 810 euros a ton a year ago and steel production in Spain is likely to be 40% from a year ago level.

Steelmakers in Germany fell after rallying for weeks in anticipation of global economic recovery. Salzgitter SA declined 5.7% to 66.76 euros and Thyssen Krupp AG fell 1.2% to 19.57 euros.

Bouygues SA, the French conglomerate with businesses in construction, media and telecom plunged 7.9% t0 28.10 euros after it reported first quarter earnings declined 29%.

In Frankfurt trading consumers, engineering and industrial stocks declined. Daimler AG fell 3.5% to 26.95 euros and BMW declined 1.4% to 27.10 euros. The U.S. auto sales in May for both companies declined more than expected.

In Paris trading, Renault SA declined 2.2% to 29.60 euros and PAS Peugeot Citroen SA fell 3.4% to 21.69 euros.

Deutsche Bank AG fell 4% to 46.41 euros, BNP Paribas fell 47.60 euros and Societe Generale declined 1.7% to 43.28 euros.

Earnings Review

Bouygues SA, the French construction-to-telecoms firm reported first quarter sales fell 2% to €6.7 billion from €6.8 billion a year ago. Net profit fell 29% to €159 million or €0.46 per diluted share compared to €224 million or €0.64 per share a year ago.

Bouygues SA, in the last one year traded as high as €52.51 in May 2008 and as low as €21.76 in March 2009. Based on the yesterday’s closing price of €30.50 the company has market cap of €10.40 billion.

Laurent-Perrier SA, the champagne grower reported full-year revenues fell 27% to €181 million from €249.4 million a year ago. Net profit fell 45% to €18.95 million compared to €34.63 million a year ago.

Laurent-Perrier SA, in the last one year traded as high as €101.00 in June 2008 and as low as €36.03 in March 2009. Based on the yesterday’s closing price of €45.00 the company has market cap of €264.26 million.

Lukoil, Russia’s largest non-state oil producer reported first quarter sales fell 41% to $14.7 billion from $25 billion a year ago. Net profit fell 71% to $905 million or $1.07 per diluted share compared to $3.16 billion or $3.83 per share a year ago.

DAX Index Movers

METRO AG led the decliners in the DAX index of 5.91% followed by losses in Salzgitter AG of 5.87%, in Volkswagen AG of 5.49%, in Deutsche Bank AG of 4.02%, in Daimler AG of 3.41%.

Bayer AG led gainers in the DAX index with a rise of 1.25% followed by gains in Fresenius Medical Care AG & Co. KGaA of 1.09%, in Linde AG of 0.84%.

CAC-40 Index Movers

Bouygues S.A. led the decliners in the CAC-40 index of 7.94% followed by losses in ArcelorMittal of 5.26%, in Vinci S.A. (Ex. SGE) of 4.60%, in Michelin SCA of 4.49%, STMicroelectronics N.V. 4.28%.

Dexia SA gainers in the CAC-40 index with a rise of 6.93% followed by gains in Vivendi SA of 0.27%.

Europe Markets Review

In London FTSE 100 Index closed lower 93.60 or 2.09% to 4,383.42, in Paris CAC 40 Index decreased 68.39 or 2.02% to close at 3,309.65 and in Frankfurt DAX index lower 89.53 or 1.74% to close at 5,054.53. In Zurich trading SMI decreased 47.51 or 0.87% to close at 5,384.71.