01/07/2003 12:49
European stocks dropped as the euro's biggest two-day gain against the dollar in almost a month heightened concern the value of U.S. sales of exporters such as DaimlerChrysler AG and Siemens AG will shrink.
SAP AG, the world's biggest maker of business-management software, fell after being downgraded by J.P. Morgan Chase & Co.
The Dow Jones Stoxx 50 Index dropped 13.55, or 0.6 percent, to 2381.92 as of 10:27 a.m. in London. The Stoxx 600 slipped 0.7 percent to 201.59, with almost twice as many shares dropping as rising. Yesterday, the indexes ended their biggest quarterly advance since the end of 1999.
The euro has gained 1 percent against the dollar this week, its steepest two-day climb since the first week of June. European exporters have said the high price of the euro is making their products more expensive and paring the value of sales generated in the U.S., Europe's largest export market.
``The euro is going to lessen European competitiveness in key industries,'' said Neil Dwane, chief investment officer for Europe at Allianz Dresdner Asset Management in Frankfurt, where he oversees about $65 billion in stocks. ``If the market was getting optimistic in the second quarter about an economic recovery this year, they will clearly be disappointed.''
Benchmark indexes slid in 13 of the 17 Western European markets. Germany's DAX fell 1.3 percent, France's CAC 40 slipped 0.8 percent and the U.K.'s FTSE 100 lost 0.3 percent.
September futures on the Euro Stoxx 50 Index of companies based in the 12 countries sharing the euro fell 0.7 percent to 2411. The index fell 0.4 percent to 2409.13.
Exporters Decline
DaimlerChrysler, the German carmaker that makes about half its revenue in the U.S., fell 1.25 percent to 30.02 euros. Siemens, Germany's biggest manufacturer, makes a quarter of its sales in the U.S. Its stock lost 1.2 percent to 42.20 euros.
Volkswagen AG shed 2.5 percent to 35.90 euros. The company, with a fifth of its sales in the U.S., yesterday evening said it will lay off 2,000 workers in Mexico, 20 percent of its workforce in the country, as U.S. demand wanes for Beetle and Jetta cars.
Porsche AG, a German sports-car maker that made 41 percent of sales in the U.S. last year, slumped 2.4 percent to 358 euros. The company will reduce the workweek to 38 hours from 40 hours at its Leipzig plant in eastern Germany without cutting any salaries, it said yesterday after the market closed.
SAP lost 3.2 percent to 99.44 euros after being downgraded to ``neutral'' from ``overweight'' by J.P. Morgan. A quarterly survey of 100 SAP customers showed they plan to spend less than anticipated in 2004, J.P. Morgan said.
Merck KGaA, Germany's fourth-biggest drugmaker, sank 4.4 percent to 24.20 euros. Merck said it will sell 4.5 million new shares to institutional investors as part of a capital increase.
The company plans to increase the share capital not owned by the Merck family, the majority shareholder, by 10 percent through the sale, it said.
Royal Ahold NV, the Dutch owner of Stop & Shop and Giant food stores, advanced 6.5 percent to 7.70 euros. The retailer cut the value of pretax earnings reductions at its U.S. Foodservice unit to $856 million from an estimated $880 million after completing an investigation into accounting irregularities.
HMV Group Plc, the U.K. operator of HMV music stores and Waterstone's book shops, climbed 4.7 percent to 140 pence, the highest level since Nov. 6. Sales at bookstores open at least a year rose 7.2 percent in the eight weeks ended June 21, aided by demand for the latest Harry Potter book, the company said.
SAP AG, the world's biggest maker of business-management software, fell after being downgraded by J.P. Morgan Chase & Co.
The Dow Jones Stoxx 50 Index dropped 13.55, or 0.6 percent, to 2381.92 as of 10:27 a.m. in London. The Stoxx 600 slipped 0.7 percent to 201.59, with almost twice as many shares dropping as rising. Yesterday, the indexes ended their biggest quarterly advance since the end of 1999.
The euro has gained 1 percent against the dollar this week, its steepest two-day climb since the first week of June. European exporters have said the high price of the euro is making their products more expensive and paring the value of sales generated in the U.S., Europe's largest export market.
``The euro is going to lessen European competitiveness in key industries,'' said Neil Dwane, chief investment officer for Europe at Allianz Dresdner Asset Management in Frankfurt, where he oversees about $65 billion in stocks. ``If the market was getting optimistic in the second quarter about an economic recovery this year, they will clearly be disappointed.''
Benchmark indexes slid in 13 of the 17 Western European markets. Germany's DAX fell 1.3 percent, France's CAC 40 slipped 0.8 percent and the U.K.'s FTSE 100 lost 0.3 percent.
September futures on the Euro Stoxx 50 Index of companies based in the 12 countries sharing the euro fell 0.7 percent to 2411. The index fell 0.4 percent to 2409.13.
Exporters Decline
DaimlerChrysler, the German carmaker that makes about half its revenue in the U.S., fell 1.25 percent to 30.02 euros. Siemens, Germany's biggest manufacturer, makes a quarter of its sales in the U.S. Its stock lost 1.2 percent to 42.20 euros.
Volkswagen AG shed 2.5 percent to 35.90 euros. The company, with a fifth of its sales in the U.S., yesterday evening said it will lay off 2,000 workers in Mexico, 20 percent of its workforce in the country, as U.S. demand wanes for Beetle and Jetta cars.
Porsche AG, a German sports-car maker that made 41 percent of sales in the U.S. last year, slumped 2.4 percent to 358 euros. The company will reduce the workweek to 38 hours from 40 hours at its Leipzig plant in eastern Germany without cutting any salaries, it said yesterday after the market closed.
SAP lost 3.2 percent to 99.44 euros after being downgraded to ``neutral'' from ``overweight'' by J.P. Morgan. A quarterly survey of 100 SAP customers showed they plan to spend less than anticipated in 2004, J.P. Morgan said.
Merck KGaA, Germany's fourth-biggest drugmaker, sank 4.4 percent to 24.20 euros. Merck said it will sell 4.5 million new shares to institutional investors as part of a capital increase.
The company plans to increase the share capital not owned by the Merck family, the majority shareholder, by 10 percent through the sale, it said.
Royal Ahold NV, the Dutch owner of Stop & Shop and Giant food stores, advanced 6.5 percent to 7.70 euros. The retailer cut the value of pretax earnings reductions at its U.S. Foodservice unit to $856 million from an estimated $880 million after completing an investigation into accounting irregularities.
HMV Group Plc, the U.K. operator of HMV music stores and Waterstone's book shops, climbed 4.7 percent to 140 pence, the highest level since Nov. 6. Sales at bookstores open at least a year rose 7.2 percent in the eight weeks ended June 21, aided by demand for the latest Harry Potter book, the company said.
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