retreated, sending the MSCI World Index lower after six straight weeks
of advances. Most stocks in Asia climbed as China's Premier Wen
Jiabao said that a stimulus plan was producing "better-than-
expected" results.
BHP Billiton Ltd. and Rio Tinto Group fell more than 1 percent as
metals retreated. Bank of China Ltd., the country's second-biggest
lender, climbed 3.9 percent in Hong Kong.
Companies from Bank of America Corp. to International Business
Machines Corp. and Halliburton Co. are scheduled to report earnings
today. Analysts estimate that profits at S&P 500 companies decreased
for the seventh straight quarter in the January to March period, the
longest stretch of declines since at least the Great Depression.
The MSCI World Index slipped 0.2 percent at 8:10 a.m. in London. The
gauge of 23 developed nations has rebounded 28 percent since March 9
as the biggest U.S. lenders said they made money at the beginning of
2009 and investors speculated the U.S. government's plan to purchase
as much as $1 trillion in toxic assets from banks will help to pull
the global economy out of its first recession since World War II.
Europe's Dow Jones Stoxx 600 Index slipped 0.3 percent. The regional
gauge added 4.7 percent last week to cap the longest stretch of weekly
gains since January 2006. NYSE Euronext delayed the start of trading
in its four European national cash equities markets due to technical
problems in the dissemination of data, the exchanges operator informed
traders.
About five stocks rose for every four that fell on the MSCI Asia
Pacific Index, which added 0.5 percent after earlier dropping as much
as 1.1 percent.
U.S. Futures
Futures on the S&P 500 slipped 0.5 percent. The benchmark index for
U.S. equities climbed 1.5 percent last week, reducing its 2009 retreat
to 3.7 percent, as profits at Goldman Sachs Group Inc. and JPMorgan
Chase & Co. ignited a rally in bank shares.
So far, first-quarter incomes have fallen less than forecast. A total
of 66 percent of the S&P 500 companies that announced results since
the earnings season began two weeks ago beat Wall Street projections,
data compiled by Bloomberg show.
Still, the rally in global stocks is likely to falter as a prolonged
recession dents corporate earnings, according to State Street Global
Advisors Inc. Profits at S&P 500 companies dropped 38 percent in the
first quarter and may slide 32 percent in the second, according to
analysts' estimates compiled by Bloomberg.
'Severe Shock'
"We're likely to see a pullback in stock markets as earnings
disappoint," said George Hoguet, global investment strategist at
Boston-based State Street Global Advisors, which oversees $1.4
trillion. "We are undergoing a severe shock and the global economy
will take several quarters to get back to trend growth."
Separately, Nouriel Roubini, the New York University professor who
predicted the financial crisis, said in Hong Kong that he was "still
bearish" and earnings will "surprise on the downside."
BHP Billiton, the world's largest mining company, lost 1.6 percent to
1,380 pence. Rio Tinto, the third-biggest, slid 1 percent to 2,375
pence. Nickel, copper and lead prices retreated on the London Metals
Exchange.
Bank of China added 3.9 percent to HK$2.92. Ping An Insurance (Group)
Co., the nation's second-largest insurer, gained 3.1 percent to HK
$52.60.
The government will continue its "proactive" fiscal policy while
the People's Bank of China will maintain its "moderately loose"
monetary policy, Wen said on April 18. The country's "rapid
reaction in rolling out the stimulus package has resolved some
prominent problems in the economy," he said.
Carphone Warehouse
Carphone Warehouse Group Plc declined 1.8 percent to 137 pence. The
U.K. mobile-phone retailer will this week say it delayed plans to
break up its retail and telecommunications units, the Sunday Telegraph
reported, without saying where it got the information.
Chief Executive Officer Charles Dunstone and Chief Financial Officer
Roger Taylor will give more information on the restructuring plan when
the company publishes its earnings, spokesman Shane Conway said in an
interview yesterday. He declined to provide further details or comment
on the Telegraph story.
The index of U.S. leading indicators for March may show today the
longest recession in the post-World War II era will start loosening
its grip in coming months. The gauge of the outlook over the next
three to six months dropped 0.2 percent following a 0.4 percent
February decrease, according to the median estimate of 40 economists
surveyed by Bloomberg News.
Stress Tests
Officials in U.S. President Barack Obama's administration have
signaled there may be no need to request more financial- rescue funds
from Congress as several banks plan to return taxpayer money and
others are pushed to tap private markets first.
White House chief of staff Rahm Emanuel said while he had not seen
results of stress tests on the 19 biggest banks, he believed "we
won't" have to get more money. Aide Lawrence Summers said "the
first resort for more capital is going to the private markets," by
issuing new equity or swapping some liabilities into stock that
dilutes other stakeholders.
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