ADR REPORT: Shares Drop On Mixed Data, Energy-Sector Worries

22nd Jun 2010 21:34

By Shara Tibken Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--International companies trading in New York declined Tuesday, after existing U.S. home sales unexpectedly fell in May, but a report of regional U.S. manufacturing activity showed continued strength. Meanwhile, the energy sector led an afternoon swoon in the broader stock market as traders fretted about legal wrangling between the industry and Washington over post-spill drilling restrictions. The Bank of New York index of ADRs fell 1.4% to 119.56. A federal judge in Louisiana on Tuesday ruled against the Obama administration's temporary ban on deepwater drilling, handing a major victory to the oil industry and delivering a stinging rebuke to the White House. Still, BP PLC (BP, BP.LN) and other energy companies traded lower as investors aren't sure the decisions will be the last word, with appeals from the Obama administration expected. BP fell 2.1% to $29.68, and Australia-based Santos Ltd. (SSLTY, STO.AU) slid 4.3% to $11.45. The European index dropped 1.2% to 107.69. Shares in Spanish banks were lower Tuesday, after credit rating agency Standard & Poor's warned that more of the country's real-estate developers are likely to fail, leading to higher credit losses on lending to the sector. Banco Santander SA (STD, SAN.MC) fell 1.8% to $11.25, while Banco Bilbao Vizcaya Argentaria SA (BBVA, BBVA.MC) declined 1.5% to $11.23. Other European banks trading lower included Allied Irish Banks PLC (AIB, ALBK.DB), down 6.6% at $2.56, and Bank of Ireland (IRE), down 7.2% at $3.88. Netherlands-based life insurance and pensions giant Aegon NV (AEG, AGN.AE) said Tuesday it's considering a sale of its non-core U.S. reinsurance business and that it will further revamp its activities in the U.K. as it seeks to raise cash to repay the Dutch government. Shares slid 3.6% to $5.98. The South African unit of Luxembourg-based steel giant ArcelorMittal (MT, MT.AE) said Tuesday it will lower the prices of some of its steel products and reduce the Sishen surcharge due to a fall in international iron ore prices. The price reduction will take effect for deliveries from July 1. Shares of the parent company fell 2.5% to $30.90. Carnival Corp. (CUK, CCL.LN) reported better-than-expected fiscal second-quarter earnings, but projected third-quarter earnings below estimates. The U.K. cruise line operator said unfavorable changes in currency exchange rates have hurt earnings, and fuel costs for the third quarter are expected to cost more than in the previous year. Shares declined 4.2% to $35.69. Standard & Poor's Ratings Services lowered its outlook on Nokia Corp. (NOK, NOK1V.HE) to negative in the wake of the profit warning by the Finnish mobile-phone maker last week. Shares slipped 2.3% to $8.50. Wal-Mart Stores Inc. (WMT) is changing partners in its RediOne insulin, moving to Eli Lilly & Co. (LLY) from Novo Nordisk A/S (NVO, NOVO-B.KO), the other big global insulin maker. Shares of Denmark-based Novo slid 1.8% to $83.78. The Latin-American index fell 1.6% to 357.63. Shareholders of Brazilian state-run energy giant Petroleo Brasileiro SA (PBR, PETR4.BR), or Petrobras, approved a capital increase Tuesday, clearing the way for what's expected to be one of the world's largest share offers. The company asked shareholders to approve a capital increase of up to 150 billion Brazilian reals ($84.8 billion) via the sale of up to 3.2 billion common shares and 2.4 billion preferred shares. Shares declined 3.6% to $37.26. The Asian index slipped 1.6% to 120.13. Chinese solar companies were among the biggest decliners, led by JA Solar Holdings Co. Ltd. (JASO), down 6.5% at $4.75, and LDK Solar Co. Ltd. (LDK), down 6.1% at $5.70. Japanese companies Mitsubishi Heavy Industries Ltd. (7011.TO) and Hitachi Ltd. (HIT, 6501.TO) said Tuesday they have reached a basic agreement to cooperate in the railway systems business in overseas markets so they can more effectively compete against much larger overseas rivals. Still, Hitachi shares slipped 1.3% to $39.10. The emerging-markets index lost 1.7% to 296.26. Indian stocks mostly traded lower, led by Indian software and outsourcing company Wipro Ltd. (WIT, 507685.BY), down 3.5% at $21.65, and ICICI Bank Ltd (IBN, 532174.BY), down 3.1% at $37.75. -By Shara Tibken, Dow Jones Newswires; 212-416-2189; [email protected] (END) Dow Jones Newswires June 22, 2010 16:34 ET (20:34 GMT)