| | Renren Leads Internet Slide as Facebook Falters: China Overnight
By Belinda Cao - Apr 24, 2012 1:45 PM CT
bloomberg.com
Chinese Internet stocks slumped in the U.S. on speculation declining profit for Facebook Inc. (FB) and Apple Inc. (AAPL)’s drop to a one-month low signal that the information technology sector is faltering.
Renren Inc. (RENN), a Chinese social networking website, was poised for the biggest one-day drop in more than two months, while China’s biggest online search engine Baidu Inc. slid to the lowest level since March 16 before reporting first-quarter earnings after U.S. markets close. The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. sank 0.4 percent to 100.58 by 2:11 p.m. in New York.
Facebook, the world’s largest social network site, said yesterday that net income in the first three months of 2012 slid 12 percent as sales growth slowed and marketing costs more than doubled. Shares of Apple, the maker of iPhones and iPads, extended a five-day drop to 8.9 percent. Renren has surged 81 percent in 2012 and Baidu has climbed 17 percent, beating a 12 percent gain in the gauge of U.S.-listed Chinese companies.
“Technology stocks have been trading weaker lately as Apple’s stock dropped and Facebook’s profit decline may also have added to concern about the sector,” Jeff Papp, a senior analyst at Oberweis Asset Management Inc. in Lisle, Illinois, which manages $700 million of assets including Chinese stocks, said by phone yesterday.
The IShares FTSE China 25 Index Fund (FXI), the biggest Chinese exchange-traded fund in the U.S. rose for the fifth time in six days, climbing 0.3 percent to $37.10. The Standard & Poor’s 500 Index (SPX) was little changed at 1,368.30 as new U.S. home sales in March came in stronger than economists estimated and company earnings from AT&T Inc. to 3M Co. exceeded analysts’ forecasts.
Baidu to Report Renren’s American depositary receipts sank 6 percent, the biggest decline since Feb. 6, to $6.36 yesterday.
Beijing-based Baidu fell 2.6 percent to $136.09, set for the lowest closing level since March 7.
Baidu may report after the close of U.S. markets that sales for the three months through March rose 76 percent from a year earlier to 4.29 billion yuan ($680 million), according to the average of 15 analysts’ estimates compiled by Bloomberg. The company said on Feb. 16 that revenue will climb to between 4.2 billion yuan and 4.33 billion yuan.
E-Commerce Dangdang Inc. (BIDU), known as Dangdang, dropped for a third day, retreating 6.4 percent to $7.56, the lowest level in almost a month based on closing prices. The declines trimmed gains for the nation’s biggest online book seller this year to 72 percent.
The Shanghai Composite Index (SHCOMP) was little changed at 2,388.83 yesterday, while the Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong was also steady at 10,817.16.
Cnooc Declines Cnooc Ltd. (883), China’s biggest offshore oil explorer, said in a statement yesterday that revenue rose 3.7 percent to 48.84 billion yuan in the first quarter as higher crude prices countered a 6.3 percent drop in production after oil spills shut China’s largest field in September. The Beijing-based company, which gets almost all its income from oil and gas production, didn’t report first-quarter earnings.
Cnooc’s ADRs slipped 0.3 percent to $204.50 in New York, falling for a third day. The company’s Hong Kong stock dropped 0.3 percent yesterday to HK$15.96, or $2.06 per share. Each ADR represents 100 underlying shares in the company.
To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net
To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net |
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