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Europe Stocks Fall as Yen Rises; U.S. Futures Erase Gain

29 Mar 2012

European stocks fell for a third day and the yen advanced after earnings missed estimates and Standard & Poor’s said Greece may have to restructure its debt again. U.S. equity-index futures erased earlier gains while Portugal’s two-year notes fell.

The Stoxx Europe 600 Index (SXXP) lost 0.4 percent at 10:10 a.m. in London. S&P 500 Index futures slipped 0.1 percent. The Hang Seng China Enterprises Index slumped 1.6 percent. The yen appreciated against all 16 of its most-traded peers. The Portuguese two-year yield rose for the first time in 11 days, jumping five basis points, with the Spanish note yield climbing three basis points. Oil fell 0.2 percent.


 March 28 (Bloomberg) -- Bob Parker, senior adviser at Credit Suisse Asset Management, discusses Italy's economy, the U.S. and French presidential elections and investing in China. He speaks with Maryam Nemazee on Bloomberg Television's "The Pulse." (Source: Bloomberg)
PICC Property & Casualty Co., China’s biggest non-life insurer, and Hennes & Mauritz AB, Europe’s second-largest clothing retailer, reported lower-than-estimated earnings. U.S. applications for unemployment benefits probably increased to 350,000 last week, up from a four-year low of 348,000 the previous week, economists said before Labor Department data.

“With all good news being factored in, we are coming to a tougher period, and markets are vulnerable,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management.

Three shares fell for every two that advanced in the Stoxx 600. H&M slid 5 percent after Europe’s second-largest clothing retailer reported first-quarter profit that missed estimates as increased textile costs and markdowns led to the weakest profitability in eight years. FirstGroup Plc plunged 14 percent after the transport operator said it’s facing “challenging trading conditions” in its U.K. bus business.


Oil traded at $105.19 a barrel in New York while Brent crude advanced 0.2 percent to $124.43 a barrel. U.S. crude stockpiles rose 7.1 million barrels in the week ended March 23, the Energy Department reported yesterday. Supplies were forecast to increase 2.6 million barrels, according to the median estimate of 12 analysts surveyed by Bloomberg News.

The yen strengthened 0.7 percent against the dollar, and climbed 0.6 percent versus the euro. The 17-nation euro weakened 0.2 percent to $1.3294.

The Italian 10-year bond yield rose two basis points before the government sells as much as 8.25 billion euros of 2017 and 2022 securities. The yield on the similar-maturity German bund, Europe’s benchmark government security, rose one basis points to 1.84 percent.

Greece will probably have to restructure its debt again and this may involve bailout partners such as European governments, said Moritz Kraemer, head of sovereign ratings at S&P.

The yield on the 10-year U.S. Treasury note was little changed at 2.20 percent before the government auctions $29 billion of seven-year securities, the last of three note sales this week.