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Oct 19, 2012

Wall Street at Close Report | MarketWatch -October 19, 2012-: U.S. stocks slammed on worst day since June :

By Kate Gibson, MarketWatch 
NEW YORK (MarketWatch)U.S. stocks fell sharply Friday, with the major indexes suffering their worst single-day drop since June, after disappointing earnings from heavy hitters, particularly in the tech sector. 
“We’ve had some household names disappointing on revenue, earnings or guidance. We had about 80 companies reporting this week: financials that did better and technology that did worse,” said Art Hogan, market strategist at Lazard Capital Markets LLC in New York. 

“Since this is the worst day we’ve had in months, it reminds us that we haven’t had much volatility or downward pressure since the bottom in June,” Hogan added. 

The Nasdaq Composite COMP -2.19%  declined 67.25 points, or 2.2%, to 3,005.62, with Friday’s slide pushing the index into negative turf for a second consecutive week, the most recent one down 1.3%. Weighing on the Nasdaq, shares of Apple Inc. AAPL -3.60%  dropped 3.6%. Read: Tech selloff takes down Apple, Microsoft. 
Remembering Black Monday crash of 1987 Francesco Guerrera and former SEC chairman David Ruder discuss his memories of the stock-market crash of 1987, and Chuck Jaffe says that while the stories of the crash are fresh, the actual losses have been forgotten.

Next week about 140 S&P 500 SPX -1.66%  companies are scheduled to report, with the coming earnings to include companies from a broader range of sectors, including consumer, energy and industrials. If those sectors follow in technology’s wake, there would be more reason for concern, Hogan said.
Retaining a weekly rise of 0.3%, the S&P 500 index dropped 24.15 points, or 1.7%, to 1,433.19, with consumer discretionary taking the biggest hit of its 10 major industry groups.
The Dow Jones Industrial Average DJIA -1.52%  slumped 205.43 points, or 1.5%, to 13,343.51, shaving its gain for the week to 0.1%.
McDonald’s Corp. MCD -4.46%  paced blue-chip losses that included all but one of its 30 components. The fast-food chain’s shares sank 4.5% after it missed consensus estimates for the third quarter.
“The earnings season is not great right now, but the fundamentals haven’t changed; the U.S. economy is still improving, and it hasn’t gotten worse in Asia or Europe,” said David Kelly, chief market strategist at J.P. Morgan Funds. After a strong run, “the market is taking a pause,” Kelly said.
Also weighing on the Dow, Microsoft Corp. MSFT -2.90%  fell 2.9% after the software maker reported earnings beneath Wall Street’s expectations, and General Electric Co. GE -3.42%  retreated 3.4% after its third-quarter revenue came in short of forecasts. Read: GE net rises on higher industrial revenue.
Wall Street’s focus is where it should be, on corporate earnings, which are “starting to slow down as expected in a typical third quarter,” said Chip Cobb, senior vice president at BMT Asset Management in Bryn Mawr, Penn. “It’s mildly disappointing because you want every quarter to be better than the last,” Cobb added.
Off the Dow, Honeywell International Inc.’s HON +1.74%  shares rose 1.7% after the diversified manufacturer cut its 2012 sales forecast but reported quarterly income that beat forecasts. 

For every stock rising, more than three fell on the New York Stock Exchange, where almost 946 million shares traded. Composite volume neared 3.9 billion.
Oil and gold prices also fell, with crude futures CLX2 -2.13%  off $2.05 at $90.05 a barrel and gold futures GCZ2 -1.32% losing $20.70 to $1,724 an ounce.
The dollar DXY +0.35%  gained against other global currencies, including the euro EURUSD +0.0087% , while Treasury yields fell, with the benchmark 10-year note 10_YEAR -0.17%  used in figuring the rate of home mortgages and other consumer loans down to 1.770%.

Housing data

A trade group reported Friday that sales of existing homes declined 1.7% in September from a 7.8% rise the prior month. The data from the National Association of Realtors was in line with expectations, but as with Thursday, economic reports and events in Europe both took a back seat to corporate results. Read: Sales of existing homes drop in September.
“Home sales did fall, but the supply of homes also fell, and if you look at the inventory of new and existing homes combined, there are 2.4 million total homes for sale in the U.S., the lowest since July 2002,” said Kelly.
Homes for sale “peaked at 4.4 million in July of 2007, so we’re 2 million lower than just after the peak of the housing bubble,” said Kelly, who noted the lower supply should drive prices up, increase housing starts as well as household net worth, and lead to more confidence and bank lending.
The heads of the 17-nation euro zone on Friday agreed to continue their pursuit of a banking supervisor. Read: Investor fears of euro-zone catastrophe fading.
“The fact they for the most part have continued to give us moderately positive guidance has allowed us to focus attention on back here. Unless we have Spain or France saying ‘hey, we’re not going to play,’ then it’s a concern,” said Cobb, of the ongoing efforts to keep the borrowing costs of both nations under control in order to keep them in the euro zone.
Friday’s sharp retreat comes 25 years after the worst single-session stock drop in history, with the Dow losing 23% of its value on Oct. 19, 1987. Read: 10 lessons from the market crash of 1987.
Stocks on Thursday fell for the first session this week after Google Inc.’s GOOG -1.90%  third-quarter earnings came in below expectations. 

Kate Gibson is a reporter for MarketWatch, based in New York.


Business in Vancouver | BIV Today's Business News -October 19, 2012-: Multimillion-dollar BC Place roof trial scheduled for one year’s time


BC Place

Multimillion-dollar BC Place roof trial scheduled for one year’s time

The date has been set for a multimillion-dollar trial that will uncover the troubled construction of BC Place stadium’s cable-supported retractable roof.


MDA lands $27m contracts with U.S. to service satellites

MacDonald, Dettwiler and Associates Ltd. (TSX:MDA) has landed multimillion-dollar contracts in the U.S. to develop a program for reusing components from defunct satellites to service working ones in space.

EnWave grows with German acquisition

EnWave Corp. (TSX-V:ENW), the Vancouver company that developed a microwave-based alternative to freeze-drying food, has announced plans to buy a majority share of a German dehydration equipment maker.

Economy and Finance

B.C. sees slow consumer price growth rate, drop in gas prices

British Columbia and Ontario saw the slowest growth in consumer prices on a year-over-year basis in September, according to Statistics Canada data released this morning.

Human Resources

Finding talent more difficult than before the recession: BMO

Almost half of Canadian businesses are finding it more challenging to attract talented employees now than it was before the recession, according to a BMO report this morning.

Education and Research

UBC hospital and support workers ratify labour deal

Members of CUPE Local 2950 voted yesterday to ratify last week's tentative collective agreement that covers its 1,500 clerical, hospital and library workers at the University of British Columbia.

Mining and Energy

Endeavour Mining closes $389 million Avion Gold acquisition

Vancouver’s Endeavour Mining Corp. (TSX:EDV, ASX:EVR), through its wholly owned subsidiary Endeavour Gold Corp., announced yesterday that it has acquired all the issued and outstanding common shares in Avion Gold Corp. (TSX:AVR).

The New York Times | Opinion Today -October 19, 2012-: A Financier in Chief

The New York Times

October 19, 2012

Opinion Today

Campaign Stops

A Financier in Chief

What would it really mean to have a man with Mitt Romney's experience at Bain Capital in the White House?
The Other Missing Man

The Other Missing Man

The real Romney, the one who seems to have no idea what it's like to be middle-class and struggling, is back.
Op-Ed Contributor

Among the Snipers of Aleppo

All the chaos in Syria would seem to bolster the argument for Western intervention. But the rebel brigades are often at cross purposes, creating a dangerous quagmire.
Shrink Inequality to Grow the Economy?
Room for Debate

Shrink Inequality to Grow the Economy?

Once we thought a rising tide would lift all boats. Now some economists think a few boats need a push, before the economy can really expand.
Op-Ed Contributor

Why the Wildfires Still Rage

A surprising number of recent fires weren't started naturally but by far more surprising human acts. Time for tougher legislation.
The War Democrats' Big Night

The War Democrats' Big Night

The 1862 midterm elections were devastating for the Republicans, especially in the Midwest.
Stone Links: Nagel Agonistes
Opinionator | The Stone

Stone Links: Nagel Agonistes

In this week's links: Thomas Nagel's "Mind and Cosmos" reviewed, Mormonism's material world, and more.
Spain's New Old Flag

Spain's New Old Flag

Reeling from the crisis, Spanish protesters turn to a symbol of the Second Republic and the democratic promise of that era.
With Tight Research Budgets, Is There Room for the Eternal Promise of Fusion?
Dot Earth Blog

With Tight Research Budgets, Is There Room for the Eternal Promise of Fusion?

A discussion of how to apportion investments in near-term and "Hail Mary" energy technologies.

The Issue That Goes Ignored

The presidential candidates remain evasive about the need for effective and sane gun control laws.

Another Defeat for the Defense of Marriage Act

An appeals court ruling against the discriminatory 1996 law should help hasten its demise.

An HPV Vaccine Myth Debunked

A study has repudiated the preposterous argument that vaccinating girls might encourage promiscuity.

Sunlight on Lobbying in Albany

The new ethics law should not be undermined by lobbying organizations that don't want to identify their major contributors.

The Opinion Pages

Read the full opinion report, including editorials, columns, op-eds and Opinionator. Go to the Section »
Another Strike Against DOMA
Taking Note

Another Strike Against DOMA

The story of the couple behind the lawsuit illustrates why DOMA is not just unconstitutional, but muttonheaded.
Maine's Marriage Hero
Frank Bruni's Blog

Maine's Marriage Hero

The face of the campaign for same-sex marriage in Maine isn't one you'd expect.

"Binders Full of Women" and the Partisan Mind

Notes on a debate "gaffe" that wasn't.
1933 And All That
The Conscience of a Liberal

1933 And All That

A slower recovery because we didn't screw up as badly.

BBC Breaking News -October 19, 2012-.: Security official 'target of Beirut blast:

BBC News
  Breaking News  

Security official killed in Beirut blast

Top Lebanese security official Wissam al-Hassan appears to have been the target of a powerful car bomb in Beirut that killed him and at least seven other people, officials say.

European Markets at Close Report | MarketWatch -October 19, 2012-: Banks lead Europe stocks lower amid earnings woes

By Sara Sjolin, MarketWatch 

LONDON (MarketWatch)European stock markets dropped on Friday, as investors digested the latest round of earnings on both sides of the Atlantic and looked to developments in the euro zone after a two-day regional summit. 

The Stoxx Europe 600 index XX:SXXP -0.76% fell 0.8% to close at 274.08, after reaching the highest level since June 2011 the prior day. On the week, the index closed 1.7% higher. 

The top shakers in world affairs A look at the group of influential individuals who made it into this year's “Power 30” list in the category of world affairs. Photo: AP 

“People have been reassessing where there’s value in the market. When looking at European equities, you find fairly good companies that have been marked down in the past, but give good dividend yields. And now things are not as bad with the [European Central Bank] and [European Union] making progress,” said Frances Hudson, global thematic strategist at Standard Life Investments.
She said, however, that Friday lacked positive triggers from the euro zone to drive markets higher, with investors instead digesting earnings out of the U.S. so far, including disappointing results from Google Inc. GOOG -2.86% Microsoft Corp. MSFT -2.67% and General Electric Co. GE -2.72%
“Earnings have in general been weaker than in the previous earnings season and we’re seeing weaker performance on revenue. You may have 61% [in the S&P 500 index] beating on earnings, but only 42% beating on revenue, telling us that what’s happening today is having an impact—we know trade between various countries hasn’t been as positive as it used to be,” she said.
Lackluster earnings reports also drove shares lower in Europe, with Aggreko PLC UK:AGK -7.17% surrendering 7.2% in London. The company said exchange-rate movements and increased bad-debt provisions likely will hurt full-year profit by 2.5%. See: Aggreko: Forex, provisions to affect FY profit
But Carrefour SA FR:CA +5.85% surged 5.9%, after the French food retailer said late Thursday it will sell its Colombian unit for 2 billion euros ($2.61 billion). See: Carrefour to sell Colombia ops to Cencosud at €2B
Developments in Brussels were in investors’ spotlight, as leaders concluded a two-day European Union summit.
Leaders agreed to a deadline of Jan. 1 to agree on a legislative framework for a single supervisory mechanism. See: Euro area sets supervisory legislation deadline
The leaders further said Greece has made good progress with implementing much-needed austerity measures, which could pave the way for the next tranche of bailout money. See: Euro area heads say Greece has made good progress
“The situation in Europe is still at a critical juncture, and even with the introduction on the banking supervision, much work has yet to be concluded,” Atif Latif, director of trading at Guardian Stockbrokers, said in emailed comments.
“Namely of concern is the ability to manage debt sustainability, the fiscal gap. Greece is trying to implement measures; on paper it seems doable but in reality many obstacles are ahead,” he added.
No news about Spain’s progress toward officially asking for a bailout came out of the meeting, putting some pressure on Spanish shares. The IBEX 35 index XX:IBEX -2.31% slumped 2.3% to 7,913.40, with Banco Popular Español SA ES:POP -5.27% lost 5.3% and Banco Santander SA ES:SAN -3.00% SAN -2.94% dropped 3%.
In the U.S., sales of existing home sales declined 1.7% in September to 4.75 million, falling short of economists’ expectations of a rate of 4.8 million. See: Sales of existing homes decline 1.7% in September
U.S. stocks traded lower on Wall Street. See: U.S. stocks drop on earnings news 

Europe banks lag, Burberry up

Risk-sensitive sectors, such as banks, drove losses across European bourses. 
n Frankfurt, Deutsche Bank AG DE:DBK -3.13% DB -3.62% lost 3.7%, while Commerzbank AG DE:CBK -4.54% dropped 5.3%.
The DAX 30 index DX:DAX -0.76% fell 0.8% to 7,380.64, but closed the week 2.1% higher.
In London, shares of Barclays PLC UK:BARC -2.85% BCS -3.75% gave up 2.9%, while Lloyds Banking Group PLC UK:LLOY -3.30% LYG -4.48% dropped 3.3%, after J.P. Morgan Cazenove downgraded its rating to underweight from neutral, and Royal Bank of Scotland Group PLC UK:RBS -2.09% RBS -2.08% lost 2.1%.
Burberry Group PLC UK:BRBY +0.68% BURBY +0.15% bucked the trend, its shares adding 0.7%, as Investec Securities raised its rating on the luxury-goods firm to buy from hold.
The FTSE 100 index UK:UKX -0.35% closed 0.4% lower at 5,896.15. On a weekly the basis, the index added 1.8%.
And in Paris, Société Générale SA FR:GLE -2.52% fell 2.5% and Credit Agricole SA FR:ACA -2.20% shed 2.2%.
Also lower, shares of Air Liquide SA FR:AI -2.51% gave up 2.5% as Société Générale lowered its rating on the industrial gas firm to hold from buy.
STMicroelectronics NV FR:STM -3.52% lost 3.5%, weighed by the disappointments from Google and Microsoft.
The CAC 40 index FR:PX1 -0.87% eased 0.9% to 3,504.56, but was up 3.4% on the week
Sara Sjolin is a MarketWatch reporter, based in London.


ADVFN III Evening Euro Markets Bulletin -October 19, 2012-.

ADVFN III Evening Euro Markets Bulletin  
Daily world financial news

Friday, 19 October 2012

London Market Report
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Stocks fall on concerns over Eurozone

Market Movers
techMARK 2,112.79 +0.01%
FTSE 100 5,896.15 -0.35%
FTSE 250 12,074.30 +0.03%
The FTSE 100 index had sunk firmly into the red by the close on Friday as investors awaited further news from the European summit. Aggreko and Bunzl were registering heavy losses in London after disappointing updates, while banking stocks were also out of favour.

So far, European leaders have announced that they would set up a Eurozone bank supervisor run by the European Central Bank (ECB) by the end of the year. “We have a date in place now for the legislative framework, which we didn’t have before – and that in itself is an important step forward," said European Council President Herman Van Rompuy.

"Global markets rode cautiously today as investors rejected the proposal by the EU to create a single Eurozone banking supervisor to aid struggling banks and provide them with access to the European bailout fund, if need be," said financial trader Shavaz Dhalla from Spreadex this afternoon.

"It seems investors are becoming frustrated with the continuous proposals outlined by EU policy makers to resolve the debt crisis but failing to provide investors with specific information regarding how the fund will operate, the time scale involved and perhaps more crucially, how much funds will be needed."

Markets have also been dampened by worse-than-expected third-quarter results from some US heavyweights over the past 24 hours, including fast-food chain McDonalds, tech giant Microsoft and American conglomerate General Electric.

In domestic news, UK public sector borrowing was £12.8bn in September, below the £13.5bn registered in the same month of 2011 and under consensus estimates.
FTSE 100: Aggreko and Bunzl disappoint
Shares in temporary power and temperature controls group Aggreko tanked after a more or less 'in-line' third-quarter statement was dampened by some disappointing guidance with extra bad debt provisions and adverse foreign exchange rates expected to dent its bottom line.

Although many analysts chose to remain upbeat about Aggreko's long-term potential - Investec, Seymour Pierce and Jefferies all maintained their 'buy' ratings on the stock - shares were down nearly 8%.

Distribution and outsourcing group Bunzl was a heavy faller after the third quarter saw a moderation in the underlying revenue growth rate, particularly in North America, where the company is going up against tough comparatives. Oriel Securities cut its view on the stock to 'hold' this morning.

Barclays continues to trade lower after announcing last night that it has set aside a further £700m in provisions against the possible costs associated with compensating customers for mis-sold payment protection insurance (PPI), taking it total provisions to £2bn. Meanwhile, according to reports, the bank is planning to cut around 10% of its staff from its EMEA equities division in an effort to reduce costs, according to reports.

Sector peers RBS and Lloyds were also out of favour, with the latter being weight down by a ratings cut from JPMorgan Cazenove to 'underweight'. Insurance giant Standard Life was also lower after being hit by a downgrade from Berenberg to 'sell'.

In contrast, shares in luxury fashion group Burberry were registering gains after Investec returned to its bullish stance on the stock and upgraded its rating from 'hold' to 'buy'. Analyst Bethany Hocking said: "The Burberry brand is far from broken, operational leverage should come through, and, whilst volatility will remain, we see long-term value here."
FTSE 250: Spectris jumps after "resilient" performance
Specris saw a robust performance in the final quarter of its financial year and while like-for-like (LFL) sales growth had slowed from the first half, analysts said that this was as expected. The instrumentation and controls company said that reported sales during the last quarter were up 12%.

House-builder Redrow was leading the downside after Chairman Steven Morgan last night ditched his plan to buy the company, bringing seven weeks of takeover talks to an end after falling four of Takeover Panel regulations.
AIM/Small Cap Report
FTSE 100 - Risers
Johnson Matthey (JMAT) 2,329.00p +1.84%
Hammerson (HMSO) 483.40p +1.53%
Hargreaves Lansdown (HL.) 753.00p +1.41%
SABMiller (SAB) 2,633.50p +1.33%
Wood Group (John) (WG.) 875.50p +1.21%
Tate & Lyle (TATE) 719.50p +1.20%
Reckitt Benckiser Group (RB.) 3,701.00p +0.98%
United Utilities Group (UU.) 729.00p +0.97%
Polymetal International (POLY) 1,166.00p +0.95%
Pennon Group (PNN) 734.50p +0.69%

FTSE 100 - Fallers
Aggreko (AGK) 2,137.00p -7.17%
Evraz (EVR) 248.30p -4.09%
Bunzl (BNZL) 1,038.00p -4.07%
Lloyds Banking Group (LLOY) 40.49p -3.30%
Eurasian Natural Resources Corp. (ENRC) 348.90p -3.03%
Barclays (BARC) 233.85p -2.85%
Vedanta Resources (VED) 1,135.00p -2.49%
CRH (CRH) 1,138.00p -2.48%
ITV (ITV) 89.55p -2.34%
Aviva (AV.) 337.20p -2.26%

FTSE 250 - Risers
Spectris (SXS) 1,779.00p +11.61%
Oxford Instruments (OXIG) 1,336.00p +6.62%
TalkTalk Telecom Group (TALK) 187.50p +4.92%
Perform Group (PER) 450.00p +4.65%
Bumi (BUMI) 255.60p +4.28%
William Hill (WMH) 357.50p +4.11%
PayPoint (PAY) 777.50p +3.67%
Ophir Energy (OPHR) 573.50p +3.61%
Centamin (DI) (CEY) 107.30p +3.17%
Mitchells & Butlers (MAB) 324.50p +2.46%

FTSE 250 - Fallers
Ted Baker (TED) 920.00p -6.50%
Ferrexpo (FXPO) 198.00p -5.76%
Ruspetro (RPO) 105.00p -4.55%
Premier Oil (PMO) 367.00p -3.88%
Redrow (RDW) 156.40p -3.75%
Lonmin (LMI) 498.10p -3.38%
Talvivaara Mining Company (TALV) 137.20p -3.18%
Drax Group (DRX) 532.50p -3.18%
Dunelm Group (DNLM) 670.00p -3.18%
Man Group (EMG) 81.00p -2.88%
Europe Market Report
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European Markets Dragged Lower By Weak Earnings Friday

The European markets finished in negative territory on Friday. The trading week in Europe has been particularly strong this week, so some profit taking should come as no surprise. The European summit in Brussels resulted in a bank deal, but overall failed to make much of an impression on the markets. Financial stocks turned in a weak performance Friday, especially shares of the major banks.

The markets were under pressure Friday due to weak earnings reports both in Europe and the United States. The weak reports from major technology companies, such as Google and Microsoft, were in focus.

European Union leaders have agreed to establish a single supervisor for banks in euro area and to put in place the required legal framework by the end of this year, so that it can be phased in next year.

In a statement after Thursday's meeting in Brussels, the European Council said a specific and time-bound roadmap for the plan will be presented at the European Council's December 2012 meeting. The meeting acknowledged the need to "break the vicious circle between banks and sovereigns."

French President Francois Hollande reportedly said Friday that the European Union meeting in Brussels did not discuss a potential aid request from Spain. Hollande warned against imposing more austerity on Spain, if the country were to ask for a bailout. He said that Spain is making all the necessary efforts to get its public finances back in order.

European Commission President Jose Manuel Barroso on Friday stressed on the need for deeper integration of Europe, particularly the euro area, and called for stronger and more binding framework for the implementation of key economic policies.

"The Commission is a strong advocate of deeper integration, in particular for the Euro area. This is urgent," he said at a press conference following the first session of the European Council meeting.

Italy's budget program is on track, but the country may need to introduce another round of spending cuts next year, La Stampa reported Friday citing a European Commission document.

The Commission feels that the government's decision to postpone an increase in the Value-Added Tax is "understandable" but posed risks, according to an October 15, 19-page document by the Economic and Monetary Affairs Commissioner Olli Rehn.

Italy's reform efforts, so far, were "ambitious" and "appropriate," but still, the work is not done, the document noted. Further action on the expenditure side will be evaluated in 2013, it said.

The Euro Stoxx 50 index of eurozone bluechip declined by 1.45 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.80 percent.

The DAX of Germany fell by 0.76 percent and the CAC 40 of France finished lower by 0.87 percent. The FTSE 100 of the U.K. dropped by 0.35 percent and the SMI of Switzerland decreased by 0.38 percent.

In Frankfurt, Deutsche Bank declined by 3.75 percent and Commerzbank lost 5.62 percent. Siemens fell by 1.18 percent, after Nomura initiated the stock with a "Neutral" rating.

Delticom dropped by 10.11 percent, following a downgrade by Commerzbank. Rheinmetall closed down by 3.48 percent, after Commerzbank reinitiated the stock with a "Hold" rating.

In Paris, Alstom dropped by 3.58 percent, after Nomura initiated the stock with a "Reduce" rating. Air Liquide declined by 2.51 percent, after Societe Generale downgraded the stock to "Hold" from "Buy."

Societe Generale fell by 2.52 percent, BNP Paribas lost 2.36 percent and Credit Agricole decreased by 2.20 percent. Carrefour surged by 5.85 percent. The retailer has agreed to sell its Colombian operations to Chilean retail group Cencosud SA for an enterprise value of $2.61 billion.

In London, Aggreko sank by 7.17 percent. The temporary power provider said margins and returns for the year will be lower than 2011 due to high mobilization costs in Mozambique contract and increase in bad debt provision.

Burberry climbed by 0.68 percent, after Investec Securities upgraded the stock to "Buy" from "Hold."

Bunzl dropped by 4.07 percent, after an interim management statement. Lloyds Banking declined by 3.30 percent, after JP Morgan downgraded the stock to "Underweight" from "Neutral." Barclays fell by 2.85 percent and Royal Bank of Scotland lost 2.09 percent.

The euro area current account surplus increased to a seasonally adjusted EUR 8.8 billion in August from EUR 8.1 billion in July, the European Central Bank said Friday.
US Market Report
Stocks Falling Sharply As Earnings News Disappoints

Stocks have moved sharply lower over the course of the trading day on Friday, adding to the losses posted in the previous session. A negative reaction to the latest batch of earnings news has generated broad based selling pressure.

The major averages have seen some further downside in recent trading, falling to new lows for the session. The Dow is down 156.43 points or 1.2 percent at 13,392.51, the Nasdaq is down 53.94 points or 1.8 percent at 3,018.93 and the S&P 500 is down 17.66 points or 1.2 percent at 1,439.68.

The weakness on Wall Street comes as traders digest the latest earnings news, including disappointing quarterly results from big-name companies such as Microsoft (MSFT), General Electric (GE), and McDonald's (MCD).

After the close of trading on Thursday, Microsoft reported fiscal first quarter earnings that fell year-over-year due in part to the deferral of some revenue related to the upcoming release of its Windows 8 operating system. The software giant also reported revenues that fell by more than expected.

Shares of Microsoft are down by 2.7 percent on the heels of the news after hitting a four-month intraday low earlier in the session.

Diversified conglomerate General Electric reported adjusted earnings that came in line with analyst estimates but on weaker than expected revenue growth. GE is currently posting a 2.9 percent loss.

McDonald's reported third quarter earnings that fell year-over-year and came in below analyst estimates. The fast food giant also reported weaker than expected sales. Shares of McDonald's are down by 3.5 percent.

Adding to the negative sentiment, the National Association of Realtors released a report showing a drop in existing home sales in September, with sales pulling back off the two-year high set in the previous month.

NAR said existing home sales fell 1.7 percent to a seasonally adjusted annual rate of 4.75 million in September from an upwardly revised 4.83 million in August. With the drop, the annual rate matched the expectations of economists.

Sector News

Semiconductor stocks are turning in some of the market's worst performances, resulting in a 2.4 percent drop by the Philadelphia Semiconductor Index. Within the sector, Marvell Technology (MRVL) and Advanced Micro Devices (AMD) are posting substantial losses.

Marvell Technology is down by 13.9 percent after lowering its third quarter revenue outlook and announcing the resignation of its CFO, while AMD is down by 14.5 percent after reporting a third quarter loss compared to a year-ago profit.

Considerable weakness has also emerged among brokerage stocks, as reflected by the 2 percent loss being posted by the NYSE Arca Broker/Dealer Index. ETrade (ETFC) is leading the sector lower after reporting an unexpected third quarter loss.

Airline stocks have also shown a notable move to the downside, dragging the NYSE Arca Airline Index down by 1.6 percent. With the loss, the index is pulling back off the three-month closing high that it set on Thursday.

Networking, steel, biotechnology, and chemical stocks are also posting steep losses amid the broad based weakness on Wall Street.

Other Markets

Meanwhile, the major European markets all moved to the downside on the day. The U.K.'s FTSE 100 Index dipped by 0.4 percent, while the German DAX Index and the French CAC 40 Index fell by 0.8 percent and 0.9 percent, respectively.

In the bond market, treasuries have moved back to the upside after coming under pressure in recent sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.1 basis points at 1.785 percent.
Friday broker round-up
Aggreko: Jefferies keeps buy rating and 2,800p target; Seymour Pierce keeps buy rating and 2,500p target; Panmure Gordon cuts target from 2,228p to 2,159p, hold rating unchanged.  Alliance Pharma: umps upgrades to buy, target lifted from 32p to 37p.

Avacta: Panmure Gordon keeps buy rating and 1.75p target.  Barclays: Nomura keeps reduce rating and 210p target.  BP: Deutsche Bank raises target from 480p to 500p, buy rating kept.

Bunzl: Oriel Securities downgrades to 'hold', 1,200p target kept; Seymour Pierce retains hold rating and 1,000p target.  Burberry: Investec upgrades from hold to buy, target lifted from 1,140p to 1,300p.  Capita: Morgan Stanley downgrades to equal weight, target lifted from 760p to 780p.

Chariot Oil & Gas: Merchant Securities keeps hold rating and 34.6p target.  CRH: Deutsche Bank cuts target from 1,300p to 1,275p, hold rating kept. Debenhams: Seymour Pierce raises target from 100p to 110p, hold rating maintained.

Dechra Pharmaceuticals: Panmure Gordon ups target from 550p to 600p, hold rating kept.  Drax: HSBC downgrades to 'neutral', target cut from 600p to 580p.  EMIS: Merchant Securities raises target from 900p to 1,050p, buy rating kept.  Go-Ahead: UBS ups target from 1,200p to 1,250p, neutral rating kept.

Imperial Tobacco: Panmure Gordon maintains buy rating and 2,900p target.  Inmarsat: Jefferies keeps buy rating and 660p target.  Johnson Service: Shore Capital upgrades to buy.  Jupiter Fund Management: JPMorgan Cazenove ups target from 260p to 299p, overweight rating kept.

Keller: Jefferies keeps buy rating and 651p target.  Lancashire Holdings: JPMorgan Cazenove cuts target from 550p to 540p, overweight rating kept.  Lloyds: JPMorgan Cazenove downgrades to 'underweight, target raised from 30p to 38p.

Man Group: JPMorgan Cazenove ups target from 45p to 63p, neutral rating kept; UBS cuts target from 110p to 100p, buy rating kept.  McBride: Panmure Gordon lifts target from 140p to 150p, buy rating kept.  Morrison: Barclays Capital downgrades to underweight, target cut from 300p to 250p.

Rank Group: Panmure Gordon maintains hold rating and 160p target.  Redrow: Jefferies keeps hold rating and 152p target; Panmure Gordon keeps hold rating kept.  Rockhopper Exploration: Merchant Securities keeps buy rating and 258p target.  Royal Bank of Scotland: JPMorgan Cazenove ups target from 250p to 270p, neutral rating kept.

Sinclair IS Pharma: Investec raises target from 36p to 40p, keeps buy rating.  Spectris: Jefferies keeps buy rating and 1,925p target.  St James's Place: Panmure Gordon maintains buy rating and 425p target.  Standard Life: Berenberg downgrades to 'sell', target lifted from 275p to 290p.

UBM: Panmure Gordon maintains sell rating and 620p target; JPMorgan Cazenove cuts target from 815p to 800p, overweight rating kept.  Vertu Motors: Panmure Gordon raises target from 50p to 55p, buy rating kept.

Whitbread: JPMorgan Cazenove ups target from 2,400p to 2,500p, overweight rating kept; Panmure Gordon ups target from 1,916p to 1,994p, hold rating kept.  William Hill: Panmure Gordon maintains buy rating and 350p target.