Stocks fell around the world as earnings from Samsung Electronics Co. to Deutsche Lufthansa AG trailed estimates and Argentina missed a payment on its bonds. Oil dropped for a fourth day and the dollar strengthened.
The MSCI All-Country World Index slid 0.8% as of 9:33 a.m. in New York. The Standard & Poor’s 500 Index (CME:ESU14) lost 0.8%. Argentina’s dollar bonds due in 2038 ended a two-day gain and Portugal’s bonds slid as one of the nation’s banks was told to raise capital. The dollar (NYBOT:DXU14) rose versus all of its 16 major counterparts. West Texas Intermediate oil (NYMEX:CLQ14) declined 0.8%.
U.S. technology shares slumped as Samsung, the world’s biggest smartphone maker, reported declining net income as it lost customers to other mobile-phone producers. European companies including Adidas AG and Lufthansa AG cited unrest between Russia and Ukraine as dimming prospects for growth. S&P said Argentina was in default as the nation missed an interest payment on $13 billion of debt after negotiations failed.
“Selling breeds selling,” said Timothy Ghriskey, who helps oversee $1.5 billion as chief investment officer for Bedford Hills, New York-based Solaris Asset Management LLC. “There’s a lot of chatter about a correction, so I think that does cause some profit taking. When traders get a whiff of that, they join right along.”
Whole Foods Market Inc. dropped 6.4% after lowering its 2014 revenue forecast. Kraft Foods Group Inc. declined 3.1% after reporting quarterly results that missed estimates.
Lufthansa lost 7.2% after Europe’s second-largest carrier said second-quarter profit fell and predicted travel markets will remain weak in the second half. Adidas slumped 15% as the sporting-goods maker lowered its forecast for 2014.
Portugal’s Banco Espirito Santo slid after saying it needs to raise capital following a first-half net loss of €3.6 billion ($4.8 billion) on provisions for its exposure to companies of Grupo Espirito Santo, which includes its biggest shareholder. The bank’s junior bonds tumbled 26%.
Portugal’s 10-year bond yield rose three basis points to 3.61%. The rate on similar-maturity Greek debt climbed 12 basis points to 6.03%.
The Bloomberg Commodity Index of 22 raw materials was headed for the biggest monthly decline since June 2013. WTI dropped to $99.17 a barrel and corn (CBOT:ZCU14) extended this month’s retreat to 13%, the biggest slump since September 2011.
Emerging-market currencies were among the biggest losers versus the dollar. A gauge that tracks the performance of 20 developing-nation currencies slid for a sixth day as India’s rupee weakened 0.8% to 60.56 and South Africa’s rand lost 0.6% to 10.7213 against the greenback.
Argentina missed a deadline yesterday to pay $539 million in interest after two full days of negotiations in New York failed to produce an accord with creditors from its last default in 2001. A U.S. judge ruled that the payment couldn’t be made unless those investors, a group of hedge funds led by Elliott Management Corp., got the $1.5 billion they claimed.
Foreign banks including Citigroup Inc., JPMorgan Chase & Co. and HSBC Holdings Plc agreed to buy defaulted bonds from plaintiffs including Elliott Management, Ambito, the Buenos Aires based newspaper, reported without saying how it got the information. The nation’s 2038 securities dropped 1.84 cents to 54.70 cents on the dollar.