Stocks Decline, Led by UniCredit, Banks; Gold, Treasuries Gain
Originally posted on Bloomberg
Stocks in Europe and Asia dropped and U.S. futures slumped on concern banks may face rating downgrades and further losses as the recession deepens. Gold climbed to a seven-month high, while Treasuries gained.
Swedbank AB and UniCredit SpA declined more than 4 percent and the euro fell to a 10-week low after Moody’s Investors Service said it may downgrade banks with units in eastern Europe. Woori Finance Holdings Co., which yesterday applied for state funding, sank 6.8 percent as the cost for South Korean banks to borrow dollars rose to a record. Daimler AG slid 4.1 percent after the maker of Mercedes-Benz trucks and cars posted earnings that missed analysts’ estimates.
“Market participants continue to be hit by a wave of disappointing corporate results and weakening economic data,” said Henk Potts, a London-based fund manager at Barclays Stockbrokers, which has about $45 billion under management. The fallout from the financial crisis “is filtering through to more and more economies.”
The MSCI World Index decreased 1.2 percent to 820.96 at 1:09 p.m. in London, extending its 2009 retreat to 11 percent. The gauge of 23 developed markets has dropped for six straight days as companies from Electricite de France SA to Diageo Plc posted disappointing results and U.S. Treasury Secretary Timothy Geithner failed to convince investors his bank rescue will work.