LATIN AMERICAN MARKETS: Mexico Posts Seventh Straight Loss; Brazilian Shares Higher
January 13 2009 - 5:33PM
Dow Jones News
By Carla Mozee
Mexican stocks extended their losing streak Tuesday as warnings
about corporate results and a slow economic-recovery process
streamed from the U.S., Mexico's largest trading partner, while
Brazilian stocks gained ground after sharp losses in the previous
session.
Mexico's IPC fell 0.5% to 21,047.30. The index, which tracks the
35 most actively traded shares, has finished in the red since Jan.
5, bringing its year-to-date decline to 9.5%.
Among decliners Tuesday, mining firm Industrias Penoles slumped
3.6% and electronics retailer Grupo Elektra dropped 3.5%.
Communication stocks lost 1.3%, with shares of Telefonos de
Mexico (TMX) down 1% and Carso Global Telecom closing with a 3.5%
decline. Shares of market heavyweight and wireless services company
America Movil (AMX), however, rose 0.8%.
A 3.6% rise in shares of cement maker Cemex (CX) helped limit
losses on the broader market, up 3.6%. They stumbled 9.3% on
Monday.
Investors in Latin America's second-largest equity market
watched stocks on Wall Street came under pressure after U.S.
Federal Reserve Chairman Ben Bernanke said that the timing and the
strength of the global economic recovery "are highly uncertain." He
also told a London audience that a recovery would only be
successful if the financial system is stabilized, and that the U.S.
government needs to pump more money into the system.
The Dow Jones Industrial Average (DJI) fell 0.3% but the S&P
500 Index (SPX) reversed course late in the session to finish up
0.2%.
A bumpy start to the fourth-quarter earnings season also
weighed. Weaker demand for metals and restructuring costs led
aluminum producer Alcoa Inc. to lose more than $1 billion.
Meanwhile, shares of General Electric (GE) dropped after Barclays
Capital said that ratings agency Moody's may downgrade the
conglomerate's shares if the company turns in a dismal
fourth-quarter report.
In Brazil, the Bovespa index rose 0.4% to 39,544.23 after
falling as much as 2% during the day. The benchmark dropped 5.2% on
Monday as resource stocks were rocked by a slide in commodity
prices.
But the first gain in crude-oil prices in six sessions only
modestly helped shares of market heavyweight Petrobras (PBR). They
rose 0.8%. Petrobras said Tuesday it exported an average of 620,000
barrels of oil a day in December, better than the previous record
of 574,000 barrels a day.
Petrobras also said its board will review the company's
strategic plan for 2009-2013 later this month, according to the
Estado newswire. The release of the plan had been delayed as
worldwide economic conditions deteriorated.
Crude-oil prices for February delivery edged up 0.5% to $37.18 a
barrel as OPEC's biggest oil producer, Saudi Arabia, talked about
the possibility that it will cut production by more than the
cartel's previously set target.
Shares of Petrobras and those of its Petrobras Energia (PZE)
unit traded in Argentina rose 1.8% and 3%, respectively, lifting
the Argentina's benchmark, the Merval, up 0.4%.
The near-term prospect for commodities continues to be derailed
by "the deepening global slump and the loss of appetite for risk in
the aftermath of the near-collapse of credit markets," said
analysts at BMO Capital Markets in a research note Tuesday.
The firm said its short- and medium-term forecasts for commodity
prices "continue to have a pessimistic slant," and that it foresees
only a modest turnaround in the latter part of the year.
"Investors should look for signs of an economic bottom, an end
to downward price pressures and rising long-bond yields as signals
for better times to come for material-based equities," said
BMO.
"Stocks usually start rebounding well ahead of the real economy
and gold trends higher about a year before inflation becomes an
issue."
Gold futures ended almost unchanged Tuesday, but copper fell
3.9% and silver lost 0.7% to $10.68 an ounce.
Shares of Brazilian miner Vale (RIO) climbed 2.2%. They dropped
7.3% in the previous session.
Chile's IPSA closed the session up 2 points at 2,470.06.
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