Tuesday, February 28, 4:45 PM EST (Thomson Financial): Latin American
stocks sank, with a flurry of gloomy U.S. economic data dragging Mexican
shares lower. Meanwhile, Argentine issues dropped, as investors took profits
following recent gains in local bellwethers. Brazil's market was closed for
the Carnival holiday and will remain closed through Wednesday afternoon.
Mexico's benchmark Bolsa Index fell 148.35 points, or 0.79%, while
Argentina's Merval Index dropped 22.17 points, or 1.28%.
Mexican shares dropped, in line with Wall Street, as investors reacted to
a flurry of economic reports signaling a slowdown in the world's biggest
economy. U.S. economic growth in the fourth quarter was revised higher to a
1.6% annual pace from an initial estimate of 1.1%. However, the pace of
fourth-quarter growth was still the weakest in three years and down sharply
from the previous quarter's growth of 4.1%.
In addition, U.S. existing home sales dropped 2.8% in January to their
lowest level in two years, while U.S. consumer confidence dropped in February,
snapping a three-month gaining streak. The Chicago PMI fell in February as
well. The raft of disappointing U.S. data fueled concerns that the economy of
Mexico's biggest trading partner and investment source may be slowing down.
In local corporate news, homebuilder Homex said its fourth-quarter net
profit rose 27% to 336.8 million pesos on a 46% rise in sales to 3.13 billion
pesos. However, on a pro-forma basis, factoring in Casas Beta results, net
profit rose just 2% on a 9% gain in sales.
Meanwhile, Grupo Mexico's labor union called a strike over contract
negotiations. The company's shares have been under pressure since an explosion
a week ago at a mine in northern Mexico that trapped 65 workers. The company
called off rescue efforts over the weekend.
Elsewhere, Argentine issues dropped, as investors took profits in Merval
heavyweight Tenaris after the steel pipemaker rose steadily in recent trading
sessions on optimism about its earnings report scheduled for tomorrow.
Brazilian shares could get a boost when they resume trading Wednesday
afternoon after Standard & Poor's Ratings Services upgraded Brazil's long-term
sovereign credit ratings to BB from BB-, citing "the continued and marked
improvement in Brazil's external debt indicators."
-- Paul.Davee@thomson.com; Thomson Financial Corporate Services
This is Thomson Financial Corporate Services Latin American Commentary.
The information herein is believed to be true and accurate, we take no
responsibility for inaccurate information and reserve the right to update our
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SOURCE Thomson Financial Corporate Group
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