Japan's Nikkei Extends Losing Streak; Drugmakers, Insurers Rise
Japan's shares fell, extending the Nikkei 225 Stock Average's worst losing streak this year, as a drop in oil and metals drove down trading companies, offsetting a gain by insurers and drugmakers.
Mitsubishi Corp., which gets more than half its profit from commodities, led trading houses to the lowest in almost two months. Nissay Dowa General Insurance Co., Japan's fifth-largest casualty insurer, and drugmaker Tsumura & Co. surged as demand increased for stocks more resilient against an economic slowdown.
Mitsubishi, Japan's biggest trading company, slumped 2.6 percent to 3,420 yen. Itochu Corp., which invests in Russia's Sakhalin oil projects, declined 2.5 percent to 1,141 yen, and Sumitomo Corp. dropped 3 percent to 1,391 yen. A gauge tracking trading companies fell to the lowest since May 2.
Sumitomo Metal Mining Co., Japan's largest gold producer, sank 2.3 percent to 1,590 yen, and Nippon Mining Holdings Inc., the largest copper producer, lost 2 percent to 655 yen.
Crude oil slid 1.8 percent yesterday, the first decline in four days, while gold fell to the lowest in two weeks. Copper sank for a third-straight day.
Nissay Dowa leapt 4.4 percent to 618 yen, while Sony Financial Holdings Inc. climbed 3.7 percent to 445,000 yen. Tsumura, which makes traditional herbal medicine, surged 4.8 percent to 2,710 yen, while Chugai Pharmaceutical Co., the Japanese partner of Roche Holding AG, gained 4.7 percent to 1,750 yen, for the second-biggest gain on the Nikkei.
Nintendo Co., the maker of Wii game machines, jumped 2.6 percent to 62,900 yen, while Sony Corp., the world's largest game console maker, added 2.9 percent to 5,060 yen.
``There is a tendency for more people buy games when the economy is slowing,'' said Etsuko Tamura, a Tokyo-based analyst at Mizuho Investors Securities Co. ``The game industry is immune to an economic slump.''
Insurers and drugmakers were the biggest winners on the Topix, while trading companies contributed the most to the index's decline.

European Stocks Drop; Fortis, Carrefour, Adidas Lead Decline
European stocks fell the most in three months on concern credit losses will reduce bank earnings, while slowing economic growth curbs profits for retailers.
Fortis tumbled 19 percent on plans to raise $2.4 billion of equity and cancel a dividend to boost solvency. Carrefour SA led retailers to their steepest retreat since January after analysts downgraded the stock and French consumer confidence slumped to a record low in June. Adidas AG, the world's second-largest sporting-goods maker, dropped as Nike Inc. said orders stagnated in the U.S.
Goldman Sachs Group Inc. predicted that Citigroup Inc., the bank that's reported the biggest losses from the collapse of the U.S. mortgage market, may post $8.9 billion more in writedowns in the second quarter and recommended selling the shares.
European Central Bank President Jean-Claude Trichet reiterated yesterday policy makers may raise their key rate from a six-year high next month to curb price increases. The Federal Reserve kept rates unchanged yesterday, after a series of seven reductions, saying ``upside risks'' to prices have increased.
National indexes declined in all 18 western European markets. The U.K.'s FTSE 100 slipped 2.6 percent. France's CAC 40 fell 2.4 percent, as did Germany's DAX.
Fortis dropped 2.39 euros to 10.26. The company will raise 1.5 billion euros ($2.4 billion) of equity. The measures will increase solvency by 8 billion euros, the company said.
Earnings for banks in the Stoxx 600 will decline 14 percent this year, according to analysts' estimates compiled by Bloomberg. That's down from a 2 percent drop forecast at the end of last year.
UBS AG, the European bank with the biggest losses from the U.S. subprime mortgage contagion, slipped 4 percent to 22.98 francs. Royal Bank of Scotland Group Plc, which earlier this month raised 12.3 billion pounds ($24 billion) in a rights offer, retreated 4.9 percent to 218 pence.
Carrefour, the world's second-biggest food retailer, fell 8.8 percent to 37.88 euros. JPMorgan Chase & Co. cut its recommendation to ``neutral'' from ``overweight,'' while Merrill Lynch & Co. lowered its rating to ``neutral'' from ``buy.''
Consumer confidence in France declined this month as the fastest inflation in 12 years eroded households' purchasing power. A gauge of Italian business confidence slumped to the lowest in almost three years this month as orders were curbed by slowing economic growth, rising energy costs and a stronger euro.
DSG International Plc tumbled 5.6 percent to 42.5 pence. The biggest U.K. consumer-electronics retailer reported its first annual loss since 1994 after writing down the value of its money- losing Italian unit.
Adidas, the world's second-largest sporting-goods maker, declined 4 percent to 41.12 euros. Nike Inc., the world's biggest athletic-shoe maker, said orders for delivery of goods through November in the U.S. were unchanged.
British Sky Broadcasting Group Plc retreated 4.9 percent to 470.75 pence, the lowest in almost four years. JPMorgan cut the stock to ``underweight'' from ``overweight,'' citing risks from a slowdown in sales and a ``poor'' economic environment.
Inmarsat Plc gained 2.9 percent to 500 pence, the highest since February, on speculation the U.K. satellite company that provides communications services may receive a bid.



U.S. stocks tumbled, sending the Dow Jones Industrial Average to its worst June since the Great Depression, as record oil prices, credit-market writedowns and a slowing economy threatened to extend a yearlong profit slump.
General Motors Corp., the largest U.S. automaker, plunged the most in three years as Goldman Sachs Group Inc. advised selling the stock and crude rose by $5 a barrel. Citigroup Inc. led the KBW Bank Index to an almost 10-year low as Goldman said the lender may report an $8.9 billion second-quarter charge and cut its dividend. Research In Motion Ltd., maker of the BlackBerry, posted its biggest drop since 2001 on concern competition with Apple Inc.'s iPhone is reducing earnings. All 10 industry groups in the S&P 500 retreated at least 1 percent as Nike Inc. said U.S. earnings dropped and Oracle Corp. predicted the slowest sales growth since 2006, adding to concern that consumers and businesses are cutting back as the economy expands at the weakest pace in five years.
Earnings at companies in the S&P 500 slid 18 percent on average in the first quarter, the third straight retreat, according to data compiled by Bloomberg. Analysts project profits will drop 8.9 percent this quarter, according to a Bloomberg survey last week.
The Dow has slumped 9.4 percent this month, its worst June since an 18 percent tumble in 1930 during the Great Depression. All 30 companies have posted losses in the month as oil surged, the unemployment rate jumped to the highest since 2004 and concern grew that global financial firms will add to $400 billion of subprime-related writedowns.

The dollar declined to the weakest level against the euro in more than two weeks as investors reduced speculation that the Federal Reserve will increase borrowing costs in August.
The U.S. currency fell against the yen as stock markets tumbled on concern a slowing economy will hurt the earnings of banks and consumer companies. The pound rose to a seven-week high against the dollar after Bank of England GovernorMervyn King said policy makers will do what's needed to stem inflation.
``People are starting to wonder whether the Fed has the guts to raise rates in the first place,'' said Matthew Kassel, director of proprietary trading at ING Financial Markets LLC in New York. ``The dollar could test $1.60 in the next month.''
The price of crude oil for August delivery rose more than $3 a barrel to $138.33 on the New York Mercantile Exchange after the head of Libya's national oil company said it may cut production. Investors buy commodities as a hedge against the falling dollar as accelerating inflation erodes the value of the U.S. currency.
Stronger Pound
The pound strengthened after King said inflation in the U.K. will probably exceed 4 percent in the coming months. Sterling increased as much as 0.7 percent to $1.9895, the highest since May 2, after theBOE governor told lawmakers in London that ``although inflation is rising now, we will insure that it falls back to the 2 percent target.''
The U.S. currency fell versus the euro yesterday as the Fed left the target lending rate at 2 percent and said in a statement at the end of its two-day meeting that ``uncertainty'' about the inflation outlook remains high.
The chance that the Fed will increase the target rate for overnight lending between banks at its next meeting on Aug. 5 has fallen to 22 percent, from 36 percent yesterday and 44 percent a week ago, according to futures on the Chicago Board of Trade. The balance of bets is on no rate change.
Trichet on Inflation
European Central Bank President Jean-Claude Trichet reiterated yesterday in speech before the European Parliament in Brussels that policy makers may increase the 4 percent main refinancing rate by a quarter-percentage point on July 3 to contain inflation.
``The euro is generally benefiting from expectations the ECB will raise rates next week,'' said Marcus Hettinger, a currency strategist in Zurich at Credit Suisse Group, Switzerland's second-biggest bank. ``The ECB is focused on inflation, and that's supporting the euro. It's not the real economic data that's driving the euro.''
``Due to the underlying growth concerns, it will be very difficult for the Fed to hike rates this year,'' said Matthew Strauss, a currency strategist atRBC Capital Markets in Toronto. ``That means the market has gotten a little bit ahead of itself pricing in rate increases, and the dollar will come under pressure.''

Friday should see the final German state CPI releases with a 3.3% y/y rate now very likely, though scheduled data starts at 0645GMT with France May PPI (expected to come in at 0.5% m/m, 5.9% y/y), followed shortly by France Q1 final GDP at 0650GMT (expected at 0.6% q/q,+2.2% y/y). Spain releases the May retail sales index and June preliminary HICP data at 0700GMT, while 0800GMT sees both Italy May hourly wages and the Eurozone April current account data. The Eurozone June economic sentiment index and June business climate indicator are also due at 0900GMT.
US data starts at 1230GMT, when personal income is forecast to rise 0.4% in May. Payrolls fell 49,000, while the average workweek was unchanged at 33.7 hours and hourly earnings rose 0.3%. PCE is forecast to rise 0.7%, as retail motor vehicle sales rose 0.3% in the month and non-auto sales jumped 1.2%. The core PCE price index is expected to rise 0.2% after the 0.1% gain in April. Canada industrial product and raw materials prices for May and average weekly earnings, payrolls for April are due at the same time. At 1355GMT, the Reuters/University of Michigan Consumer Sentiment Index is expected to be unrevised at 56.7 at the end of June.
At 1630GMT, ECB President Jean-Claude Trichet, Governing Council member Mario Draghi and PBOC Governor Zhou Xiaochuan are due to host a press conference, in Rome.