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panique
24/10/2008 12:32
Global Stocks, U.S. Futures Fall, Led by Carmakers; Yen Rallies
By Sarah Jones
Oct. 24 (Bloomberg) -- Stocks tumbled around the world and U.S. index futures fell on deepening concern the global economic slump will crimp earnings. The yen climbed to a 13-year high against the dollar as investors shunned higher-yielding assets.
Trading in futures on the Standard & Poor's 500 Index and the Dow Jones Industrial Average was limited to stop contracts from dropping, following declines of more than 6 percent. The U.K.'s FTSE 100 Index sank 8.1 percent and the pound slid the most versus the dollar since 1971 after the economy shrank for the first time since 1992. South Korea's Kospi Index slumped 10 percent as the country's economy grew at the slowest pace in four years.
The MSCI World Index lost 4.3 percent to 871.89 at 10:49 a.m. in London, extending this week's retreat to 8.2 percent. Futures on the S&P 500 expiring in December fell 6.6 to 855.2, reaching the ``limit down'' level.
``The panic levels are now quite unseen,'' said Christian Gattiker, Zurich-based head of equity research at Bank Julius Baer & Co. which manages about $307.6 billion globally. ``It's difficult to have any words for this situation right now.''
The MSCI World has plunged 45 percent in 2008, headed for its worst year on record, as credit-related losses and writedowns topped $660 billion in the worst financial crisis since the Great Depression.
Toyota Motor Corp. tumbled 6.4 percent following its first drop in quarterly sales in seven years, while PSA Peugeot Citroen slipped 14 percent after cutting its forecast. General Motors Corp. slid 10 percent in Europe.
Stoxx 600, S&P 500 Futures
Europe's Dow Jones Stoxx 600 Index slid 9.5 percent as Air France-KLM Group said it will struggle to meet profit targets. The MSCI Asia Pacific Index sank 6 percent.
Trading below the ``limit down'' level for the S&P 500 futures will resume when U.S. exchanges open for regular trading, said Jeremy Hughes, a London-based spokesman for the Chicago Mercantile Exchange.
Analysts have cut profit forecasts this year as the credit turmoil spread, threatening economic growth. Earnings for companies in Europe's Stoxx 600 will decline 4.4 percent in 2008, down from 11 percent growth predicted the start of the year, according to estimates compiled by Bloomberg.
The yen climbed against the dollar as the risk of a global recession prompted investors to slash carry trades, in which they fund purchases of higher-yielding assets with the Japanese currency.
Treasuries rose, headed for their biggest weekly gain since 1995. The 10-year yield fell 35 basis points this week, the most since May 1995, on speculation government and central bank efforts to revive lending won't avert a global slowdown.
The pound tumbled below $1.53 in its biggest drop in at least 37 years after a report showed the U.K. economy contracted more than forecast in the third quarter, bringing the nation to the brink of a recession.
Money-Market Rates
Money-market rates in London may rise. The London interbank offered rate, or Libor, that banks charge for overnight loans in dollars may climb 4 basis points to 1.25 percent today, according to Jan Misch, a money-market trader at Landesbank Baden-Wuerttemberg, Germany's biggest state-owned bank. It increased for the first time in 10 days yesterday.
Toyota sank 6.4 percent to 3,200 yen. The world's second- largest automaker reported a decline in quarterly sales for the first time in seven years as the financial crisis crippled worldwide auto demand.
Toyota sold about 2.236 million vehicles worldwide in the three months ended Sept. 30, down 4.3 percent from a year earlier.
``Automakers are being hit in terms of growth,'' said Amandine Gerard, a fund manager at KBL Richelieu Gestion in Paris, which oversees $5.1 billion. ``Job cuts and new models aren't sufficient. The industry is directly hurt by the slowdown.''
Peugeot, GM
Peugeot retreated 14 percent to 15.46 euros after Europe's second-biggest carmaker cut its full-year sales and earnings targets. Third-quarter sales dropped 5.2 percent to 13.3 billion euros ($17 billion) amid a European auto-market slump.
The company said its full-year operating profit will amount to 1.3 percent of revenue, abandoning a 3.5 percent target, while vehicle sales probably will fall 3.5 percent.
GM, the world's largest automaker, declined 10 percent to $5.48 in Germany trading. Ford Motor Co., the second-biggest U.S. carmaker, retreated 4.6 percent to $1.91.
Volvo AB sank 21 percent to 34.30 kronor. The world's second-largest maker of heavy trucks cut its industry growth outlook for this year after curtailing production as demand slows and some customers struggle to finance the purchase of new equipment. The European market for heavy trucks may be unchanged this year, while North America will contract by 10 percent, Volvo said.
Air France
Air France dropped 8.6 percent to 10.85 euros after Europe's biggest airline said it will be ``very difficult'' to meet its 1 billion-euro operating-profit target for the 12 months through March 2009.
Anglo American Plc and Total SA led a retreat by commodity producers as base metals fell in London and crude oil dropped after OPEC agreed to cut oil production for the first time in almost two years.
Anglo American, the world's fourth-biggest diversified mining company, lost 8.1 percent to 1,140 pence as copper dropped for a fifth day. Rio Tinto, the world's third-biggest mining company, declined 7.1 percent to 2,082 pence.
Lead, nickel, tin and zinc also retreated on the London Metal Exchange.
Total, Europe's third-biggest oil company, fell 7.1 percent to 34.77 euros. Royal Dutch Shell Plc, Europe's largest oil company, declined 6.4 percent to 1,452 pence.
Commodities Slump
Crude for December delivery dropped as much as 7.1 percent to $63.05 a barrel on the New York Mercantile Exchange after 13 OPEC nations decided to reduce supply by 1.5 million barrels a day at a meeting in Vienna today.
HSBC Holdings Plc, Europe's largest bank, tumbled 10 percent to 723.75 pence. Morgan Stanley slashed its price estimate for the shares in Hong Kong by 25 percent as the contagion from the global turmoil spreads to Asia. The brokerage also lowered its price target for the London shares by 7.9 percent to 580 pence.
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
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