The major markets across Europe are expected to open lower on Wednesday, mirroring the losses on Wall Street overnight on disappointing retail sales data and a weaker-than-expected producer price report.
The Commerce Department said that retail sales fell 1.1% month-over-month in March following an upwardly revised 0.3% increase in February. The decrease came as a surprise to economists, who had expected sales to increase by 0.3%. In another report, the Labor Department said that its producer price index fell 1.2% in March compared to economist estimates of a flat reading. Core producer prices, which exclude food and energy prices, were unchanged compared to the previous month.
The Dow closed down 137.63 points or 1.7% at 7,920, the Nasdaq closed down 27.59 points or 1.7% at 1,626 and the S&P 500 closed down 17.23 points or 2.0% at 842.
After the markets closed on Wall Street, Intel Corp. reported a 55% drop in profit for the first quarter on lower revenues and deteriorating margins. However, the earnings beat analysts' expectations. Intel said it was not providing an official revenue outlook for the second quarter, but for internal purposes, it is currently planning for sequentially flat revenues for the second quarter. On a positive note, the company's chief executive Paul Otellini said PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns.
Markets across the Asia-Pacific region are trading in negative territory on concerns about disappointing retail sales in the U.S.
Economic data released by the commerce ministry in China revealed that Foreign Direct Investment in to the country declined 9.5% during March, the sixth consecutive month of declines, as investors curtailed their spending amid global economic crisis. The Chinese Government will be releasing its GDP numbers for the first quarter of 2009 tomorrow.
The markets in Europe closed in positive territory on Tuesday, led by bank stocks after Goldman Sachs reported strong results for the first quarter, on optimism that the worst of the credit crisis is over.
The FTSEurofirst 300 index of pan-European blue chips closed 1.49% higher at 790 points, while the narrower DJ Stoxx 50 index rose 1.34% to 1,943 points. The U.K.'s FTSE 100 index rose 0.13% to 3,989, while the French CAC 40 index surged up 0.88% to 3,000 and Germany's DAX index climbed 1.47% to 4,557.
On the economic front, the Federal Statistical Office in Germany reported that wholesale prices declined 0.9% month-on-month in March. Year-on-year, the wholesale prices declined 8%. Analysts expected prices to drop 0.3% month-on-month and 7.1% year-on-year.
In the UK, DCLG House price data for February is slated for release shortly after the market opens at 4.30 A.M. ET.
In corporate news, alcoholic beverages producer Pernod Ricard SA might witness action after the company stated that it is planning to raise 1 billion euros through the sale of new shares at a price of 26.70 euros per share, which is 36% lower than the current market price. In a separate release, the company stated that sales for the first nine-months of fiscal 2008/09 increased 9% to 5.56 billion euros
ASML Holding, the Netherlands-based maker of semi-conductor equipment, reported a net loss of 177 million euros for the first quarter compared to a net profit of 145 million euros reported for the same quarter last year.
Technology related stocks including STMicroelectronics might see some activity following the release of financial results by Intel and ASML.
UBS AG, the biggest bank in Switzerland, announced that it would reduce the total workforce to 67,500 in 2010. As at end of March 2009, the bank employed 76,200 people across 50 countries. The bank further noted that it would report a net loss attributable to shareholders of almost 2 billion swiss francs, or $1.75 billion, for the first quarter.
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