Values slide on gloomy economic data

Stocks suffered across almost all markets as disappointing economic data emerged from the US and Europe and new worries arose on the security of Russian gas supply.

Irish bonds also reversed gains that had pushed yields to new lows in the morning session, as peripheral markets were generally clouded in gloom.

DUBLIN
The Iseq closed just over 3 per cent weaker after a very poor session. Most of the main players were badly hit in the general decline, with stocks that have performed well in the year to date staging a retreat.

Smurfit finished 60.1 cent, or 3.5 per cent, weaker at €16.454, while CRH dropped by 4.7 per cent to €19.66. Bank of Ireland maintained this week's poor performance by shedding 1 cent to close at 24.7 cent and Green REIT fell by 4.1 cent to €1.25.

Paddy Power, where investors continue to digest news of the planned departure of chief executive Patrick Kennedy, was badly punished as it weakened 324 cent, or almost 6 per cent, to €51.15.

Ryanair, which is due to issue second-quarter results on Monday, declined by 20.8 cent to €6.522, and Aer Lingus fell by 10 cent, or almost 7 per cent to €1.40.

Kerry held up reasonably well amid the general disarray, shedding just less than 1 per cent to finish at €53.581. The food group yesterday opened a new regional development centre in Durban, South Africa.

UTV was flat at €2.99 after issuing a generally positive investor update.

LONDON
UK stocks dropped from their highest level in more than 14 years after the weak US industrial production numbers emerged in the early afternoon.

The FTSE 100 Index fell 37.6 points, or 0.6 per cent, to 6,840.89 at the close of trading in London. The gauge has still climbed 4.9 per cent from a March 24th low amid an increase in mergers-and-acquisitions activity. The FTSE All-Share Index fell 0.8 per cent.

“There’s some hesitancy in the market as investors look for something to grasp at,” said Leigh Himsworth, head of UK equities at City Financial Investment in London. “There has been no earnings growth to justify valuations.”

Dixons Retail and Carphone Warehouse fell more than 8 per cent after agreeing to merge. Investors in each company will hold 50 per cent of the new entity, to be known as Dixons Carphone Plc.

Vodafone slid 2.3 per cent as Goldman Sachs lowered its rating on the company.

EUROPE
European stocks fell the most in a month on the back of the disappointing growth figures, while companies including Deutsche Post and Thomas Cook slid after posting results. Deutsche Post lost the most in two years after first-quarter earnings before interest and taxes missed projections.

Thomas Cook sank the most in more than two years after saying sales in the first-half retreated 6.6 per cent.

Cie Financiere Richemont gained the most in a year after the maker of Cartier jewellery said it will raise its dividend.

Hennes and Mauritz climbed the most since September after higher-than-forecast sales.

US
Stocks fell, sending the Russell 2000 Index of small companies down 10 per cent from its high, as a sell-off in small-cap and internet stocks spread to the broader market.

Economic reports showed industrial production in the US unexpectedly declined in April, while the cost of living rose by the most in almost a year and US jobless claims fell last week.

Wal-Mart Stores fell more than 2 per cent after it forecast profit that missed estimates. “The primary sentiment right now is cautious and nervous,” said Michael James, a Los Angeles-based MD of equity trading at Wedbush Securities.

Cisco Systems advanced 6.7 per cent after a fourth-quarter revenue forecast that beat analysts’ projections. – (Additional reporting: Bloomberg)