SHARES
TEL AVIV
Israeli stocks dropped for the first time in three days Wednesday, following declines in global markets as concern over US subprime mortgages spread. Real estate stocks including Africa Israel Investments Ltd. led the retreat.
The TA-25 Index tumbled 23.46, or 2.1 percent, to 1,097.71 at the close, as all shares in the measure fell. Investors traded about NIS 2.43 billion of shares and convertibles.
European and Asian stocks dropped after Bear Stearns Cos. stopped investors from pulling money out of a hedge fund and Macquarie Bank Ltd. said two of its funds may post losses.
"We haven't seen the end of the fall yet, as global markets still have room to drop," said David Kababia, a trader at Israel Discount Bank Ltd. in Tel Aviv. "The US subprime market is causing losses for many large financial institutions."
Africa Israel, a holding company and property developer, declined NIS 10.70, or 2.7%, to NIS 379.30; Gazit-Globe, a real estate developer, dropped NIS 1.80, or 3.7%, to NIS 46.65; and Elbit Medical Imaging, a medical company turned property developer, fell NIS 8.20, or 4.3%, to NIS 180.80.
Shares were pushed lower after the Bank of Israel said Tuesday it expects inflation to reach 3%, the top of the government's target range, raising concern it will continue to increase interest rates.
"It seems that after a year of interest-rate declines, the Bank of Israel has changed direction," Kababia said. "An interest rate hike will increase costs for companies."
The central bank unexpectedly raised its key lending rate a quarter-point to 3.5% last month, the first increase in a year.
Nice Systems climbed NIS 2.60, or 1.8%, to NIS 146.30. The maker of digital-recording products said second-quarter net income rose to $11.2 million helped by sales of products that gauge the performance of call centers and branch offices. The company raised its revenue and profit forecasts for the year.
Teva Pharmaceutical Industries fell NIS 5, or 2.7%, to NIS 181. The world's biggest maker of generic drugs reported the slowest profit growth in five quarters as the company lost exclusive rights to make copies of two cholesterol treatments.
WALL STREET
Most stocks fell after traders speculated Beazer Homes USA Inc. may file for bankruptcy and Bear Stearns Cos. blocked withdrawals from a hedge fund.
Beazer, a homebuilder under investigation by the FBI, tumbled the most ever and led a gauge of homebuilders to its lowest level since 2003. Bear Stearns, Citigroup Inc. and Lehman Brothers Holdings Inc. dropped on concern the losses from subprime mortgages are spreading.
The Standard & Poor's 500 Index lost 2.38, or 0.2%, to 1,452.89 during late morning trading in New York. The Dow Jones Industrial Average slipped 6.59, or 0.1%, to 13,205.4. The Nasdaq Composite Index decreased 15.55, or 0.6%, to 2,530.72.
EUROPE
Stocks declined after Bear Stearns Cos. stopped investors from pulling money out of a hedge fund and Macquarie Bank Ltd. of Australia said two of its funds may post losses as the US subprime-market rout spreads.
All 18 industry groups in the Dow Jones Stoxx 600 Index retreated.
The Stoxx 600 lost 1.6% to 374.1 at the close in London. The Stoxx 50 slid 1.5%, while the Euro Stoxx 50, a measure for the euro region, declined 1.9%.
National benchmarks decreased in all 17 western European markets that were open, except Luxembourg. France's CAC 40 slid 1.8%, Germany's DAX sank 1.6%, while the UK's FTSE 100 Index fell 1.7% to 6,250.60. The Swiss market was closed for a public holiday.
ASIA
Stocks slumped, extending a global equities rout.
The Morgan Stanley Capital International Asia Pacific Index declined 2.6% to 151.89 at 6:10 p.m. in Tokyo, set to close at its lowest since June 27. All Asian markets fell, except in Vietnam. Taiwan's Taiex Index plunged 4.3%, the biggest drop in the region. Australia's S&P/ASX 200 Index lost 3.3%, the most since September 17, 2001. Japan's Nikkei 225 Stock Average slid 2.2% to 16,870.98 and the broader Topix index also lost 2.2%.
CURRENCY
The shekel fell against the dollar to a Bank of Israel fixing of 4.3370 and later traded at 4.3267, from 4.3066 Tuesday. The dollar hit an almost four-month low against the yen before bouncing back Wednesday as fears of spreading subprime mortgage market woes led investors to unwind carry trades.
The euro was last up 0.2% at $1.3696, while the dollar was up 0.2% at 118.71 yen, after earlier sliding to 117.58 yen.
COMMODITIES
Crude oil rose to a record $78.77 a barrel in New York on concern that plunging US inventories will leave refineries with inadequate supply.
Crude for September delivery rose 29 cents, or 0.4%, to $78.50 a barrel during morning trading on the New York Mercantile Exchange. Gold fell in New York on speculation a decline in equity markets will reduce investment demand for the precious metal.
Gold futures for December delivery fell $3, or 0.4%, to $676.30 an ounce on the Comex division of the NYMEX.
