DOW - futures up again- shouldn't stick
A+B does not equal C
Even if the article that follows was right and the credit crisis was over, that's not what's ailing the economy and the market. It's just one of many issues.
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UBS Sees Q1 Net Loss of $12 Billion- AP
Swiss bank UBS AG on Tuesday reported more serious damage from exposure to the U.S. subprime crisis, saying it would post first-quarter losses of $12.1 billion and that it would seek $15.1 billion in new capital.
* Deutsche Bank Expects $4B Subprime Hit- AP
* Wall Street Heads for Gains; UBS in View- AP
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Stocks in Europe, Asia Rise, Led by UBS; U.S. Futures Advance
By Adria Cimino
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April 1 (Bloomberg) -- Stocks in Europe and Asia rose as investors speculated the end of losses from the credit-market turmoil may be nearer for banks and higher prices will lift profits for chipmakers. U.S. index futures increased.
UBS AG rallied the most in a week in Zurich on speculation an additional $19 billion in writedowns and a $15 billion capital increase for Europe's largest bank may signal a turning point. Elpida Memory Inc., Japan's largest memory-chip maker, surged for a second day after its chief executive said the company will raise prices. Unilever climbed after Deutsche Bank AG recommended the world's second-largest consumer products maker on sales prospects.
Europe's Dow Jones Stoxx 600 Index added 1.6 percent to 310.75 as of 11:52 a.m. in London, rebounding from its worst first quarter since at least 1987. Futures on the Standard & Poor's 500 Index gained 0.7 percent, and the MSCI Asia Pacific Index increased 0.2 percent.
``We can imagine that the worst may be behind us,'' said Nathalie Pelras, a fund manager at Richelieu Finance in Paris, which oversees $6.3 billion. ``The UBS capital increase is guaranteed so there aren't financing worries. That allows investors to see the glass as half full.'' Pelras co-manages the Richelieu Special, Europe Entrepreneurs and Valeur funds.
About $2.8 trillion in value has been erased from global stock markets this year on concern credit losses and an economic slowdown will curb profit growth, according to data compiled by Bloomberg.
Europe, Asia
National benchmark indexes gained in all of the western European markets except Norway and Iceland. The U.K.'s FTSE 100 added 0.8 percent. France's CAC 40 rose 1.2 percent and Germany's DAX climbed 1.5 percent.
Japan's Nikkei 225 Stock Average added 1 percent today, while Hong Kong's Hang Seng Index gained 1.3 percent.
UBS jumped 7.3 percent to 30.96 Swiss francs. The European bank with the highest losses from the U.S. subprime crisis will seek to raise 15 billion francs ($15 billion) in a capital increase. Chairman Marcel Ospel will step down and be succeeded by Peter Kurer, UBS said. An additional $19 billion in writedowns will lead to a loss for the first quarter of 12 billion francs, the second-consecutive shortfall.
``Much of it was priced in, the news is almost positive,'' said Sacha Holderegger, a banking analyst at Clariden Leu in Zurich. ``The writedowns are high but they had been expected.''
Deutsche Bank raised its recommendation on the stock to ``buy'' from ``hold,'' saying ``UBS's total risk exposure has declined'' in a note today.
JPMorgan
JPMorgan Chase & Co., the third-largest U.S. bank, added 6 cents to $43.01 in Germany. The bank may post ``virtually'' no writedowns in losses related to collateralized debt obligations, Goldman, Sachs & Co. analyst William F. Tanona wrote in a note to clients today.
Financial firms worldwide have racked up about $208 billion in losses related to the collapse of the subprime mortgage market. The turmoil in financial markets poses the most severe crisis for banks in 30 years, Morgan Stanley and Oliver Wyman said in a joint report today.
Elpida surged 8.1 percent to 3,590 yen, extending yesterday's 2.2 percent gain. The company plans to increase chip prices by 20 percent in April after demand rose and inventory levels fell, Chief Executive Yukio Sakamoto said in a Bloomberg Television interview broadcast yesterday.
Infineon Technologies AG, Europe's second-biggest semiconductor maker, climbed 5.8 percent to 4.71 euros. STMicroelectronics SA, the region's largest, rallied 2.4 percent to 6.9 euros.
Unilever, Ubisoft
Unilever rose 2.3 percent to 21.76 euros. The maker of Dove soap and Skippy peanut butter was upgraded to ``buy'' from ``hold'' at Deutsche Bank.
``The company should be fully participating in buoyant sales being reported elsewhere in the sector,'' London-based analyst John L. Parker wrote in a note dated yesterday. Last year ``saw both margin and sales progress. In 2008, we could also see market share gains.''
Ubisoft Entertainment SA jumped 5.8 percent to 57.73 euros. Europe's second-largest maker of video games said fiscal 2008 sales beat a previous forecast on games including ``Assassin's Creed.'' Sales in the year through March were about 920 million euros ($1.44 billion), beating a previous outlook for sales of 875 million euros, Ubisoft said.
AstraZeneca, Heidelberger
AstraZeneca Plc climbed 4.9 percent to 1,977 pence. JPMorgan Chase & Co. raised its recommendation on shares of the U.K.'s second-biggest drugmaker to ``neutral'' from ``underweight.''
Heidelberger Druckmaschinen AG plunged 10 percent to 15.23 euros. The world's largest maker of printing machines fell after failing to meet its annual profit and sales targets.
Worse-than-expected orders in its fourth quarter, which ended yesterday, led annual sales to fall about 3 percent from the prior year's 3.8 billion euros ($6 billion), the company said. Net income also shrank.
Stora Enso Oyj and UPM-Kymmene Oyj advanced after Deutsche Bank raised its recommendation on the papermakers to ``buy'' from ``hold.''
North American magazine paper prices have ``increased substantially since mid-2007, and have more than offset the recent sharp U.S. dollar depreciation,'' London-based Mathias Carlson wrote.
Stora Enso, the world's second-largest, climbed 5.6 percent to 7.72 euros. UPM-Kymmene, the third-biggest papermaker, added 4.5 percent to 11.76 euros.
To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.
Last Updated: April 1, 2008 06:55 EDT |
