Stocks down as euro weakens again

STOCKS FELL, the euro weakened for a third day against the dollar and Germany’s five-year note yield fell to a record amid concern about employment markets in Europe and the United States yesterday.

DUBLIN

VOLUMES IN Dublin remained thin as the hangover from Tuesday’s May Day holiday across the continent continued to subdue trading.

Quarterly figures from Kerry Group late morning were broadly in line with expectations. The company’s share price reacted modestly, with a rise of less than half a per cent or 13 cent to close at €34.60.

Despite the revelation that Dubai-based airline Ethiad had built up a 3 per cent stake in the airline and with a trading update due tomorrow, Aer Lingus closed down 1.8 per cent or one cent at €0.97. Shares in Ryanair meanwhile, closed up 1.61 per cent or seven cent at €4.42.

Trading in United Drug saw some volume in advance of results due next week, with the company’s shares closing up 1.1 per cent or two cent at €2.30.

Drinks group CC saw shares dip by 1.2 per cent or four cent to close at €3.72, with one analyst suggesting the weather battering Ireland and Britain was dampening appetite for cider.

On foot of positive sentiment in housing and building materials stocks Stateside, Grafton closed up 0.54 per cent or one cent at €3.33 while Kingspan closed up 1.2 per cent or 10 cent at €7.88.

LONDON

BRITISH STOCKS declined the most in more than a week as a contraction in euro zone manufacturing added to signs that the economic slump in Britain’s largest export market is worsening.

The FTSE 100 Index lost 54.12, or 0.9 per cent, to 5,758.11 at the close in London.

Standard Chartered led banks lower, falling 3.9 per cent to 1,453 pence as Britain’s second-largest lender by market value said operating profit in the first quarter expanded by a “low double-digit” rate from a year earlier.

Barclays lost 5.1 per cent to 213.65 pence and Lloyds Banking Group fell 4.5 per cent to 32.08 pence after the shares jumped 8.3 per cent yesterday.

Royal Bank of Scotland Group, which is due to report earnings on tomorrow, slid 2.1 per cent to 24.77 pence.

Home Retail sank 13 per cent to 87.55 pence after the owner of the Argos and Homebase chains said it won’t pay a final dividend. The company posted a 60 per cent drop in annual profit to £102 million.

BSkyB climbed 1.5 per cent to 701.5 pence for a third day of gains. The UK’s biggest pay-TV operator reported a jump in operating profit to £1.19 billion in the nine months to the end of March.

Next climbed 2.6 per cent to 2,971 pence, its first advance in three days. Britain’s second-largest clothing retailer maintained its annual profit forecast after a first quarter in which the growth of the Directory home-shopping unit compensated for a drop in store sales.

EUROPE

EUROPEAN STOCKS declined for the second time in three days after reports showed that US employers added fewer payrolls than forecast and euro-area unemployment rose to a 15-year high.

The Stoxx Europe 600 Index lost 0.4 per cent to 257.39 at the close of trading, after earlier climbing as much as 1 per cent.

Euro-region unemployment rose to a 15-year high and manufacturing contracted for a ninth month, separate reports showed yesterday.

France’s CAC 40 rose 0.4 per cent and Germany’s DAX retreated 0.8 per cent. Spain’s IBEX 35 Index dropped 2.6 per cent to 6,831.90, its lowest level since March 2009.

A gauge of banks performed the worst of the 19 industry groups on the Stoxx Europe 600 after spreads between German 10-year government bonds and Italian and Spanish securities expanded.

Banco Santander and UniCredit, the biggest lenders in Spain and Italy, declined 3.3 per cent to €4.56 and 5.7 per cent to €2.84 respectively. Deutsche Bank and Commerzbank each fell at least 2.5 per cent as southern European bonds dropped.

NEW YORK

US STOCKS fell, dragging the Dow Jones Industrial Average down from the highest level since 2007 on the employment data.

Commodity and financial shares dropped the most among 10 groups in the SP 500 as Alcoa and Bank of America slid at least 1.8 per cent.

Stocks pared losses as a measure of homebuilders in SP indexes rallied 4.7 per cent, with all 11 companies advancing.

A rebound in Apple, the world’s most valuable company, also helped trim some of the earlier slump in equities. Apple rose 0.4 per cent to $584.24, after dropping for four straight days.

Online travel-recommendation service TripAdvisor surged 17 per cent to $42.84 for the biggest gain in the SP 500. – Additional reporting Bloomberg