Israel's benchmark TA-25 Index dropped Wednesday from a record high reached a day earlier. Bank Hapoalim Ltd. and Bank Leumi Le-Israel Ltd., the country's largest lenders, paced the slide after Citigroup Inc. said third-quarter earnings were "disappointing."
The TA-25 Index declined 0.6 percent to 926.69. Investors bought and sold about NIS 1.23 billion in shares and convertibles.
Bank Hapoalim lost 1.4% to NIS 20.50. Bank Leumi slid 1.1% to NIS 16.83.
"Disappointing performance of the banks in the third quarter indicates that the decent economic growth profile is not benefiting key sectors in the equity market," New York-based strategists Andrew Howell and Geoffrey Dennis wrote in a report dated Tuesday. They have an "underweight" rating on Israeli shares.
Bank Hapoalim said November 21 that net profit excluding one-time gains dropped 19% to NIS 576 million in the third quarter, while Leumi said November 29 that net income from ordinary operations declined 48% to NIS 296m.
Bezeq Ltd. declined 2.4% to NIS 6.49. Shares of Israel's largest telecommunications company were downgraded to "hold" from "buy," because the main growth catalysts for the company are "in the past," Deutsche Bank AG analyst Michael Klahr wrote in a note to investors.
Gazit-Globe Ltd. rose 3.3% to NIS 58.10. The real estate investment company and Mills Corp., a US mall developer in which Gazit holds a 9.7% stake, agreed to offer shareholders a compromise slate of candidates for Mills' board, ending Gazit's efforts to nominate its own group. Gazit wants to invest as much as $1.2b. in the Chevy Chase, Maryland-based company rather than allow it to be sold.
US stocks fell after a five-year revenue forecast from Merck & Co., the nation's fourth-largest drugmaker, failed to exceed analysts' estimates.
The Standard & Poor's 500 Index lost 0.1% to 1,414.12 at midday in New York. The Nasdaq Composite Index, which gets 42% of its value from computer-related shares, slipped 0.2%, to 2,447.13. The Dow Jones Industrial Average dropped 0.1% to 12,321.27.
European banking stocks rose after Royal Bank of Scotland Group Plc, the UK's second-largest bank, forecast increased profit and earnings at Anglo Irish Bank Plc topped analysts' estimates. Benchmarks were little changed.
The Dow Jones Stoxx 600 Index fell 0.1% to 353.65 in late afternoon trade in London. The Stoxx 50 was little changed and the Euro Stoxx 50, a measure for the 12 nations sharing the euro, lost 0.2%.
National benchmarks fell in 10 of 18 western European markets. Germany's DAX dropped 0.1%, the UK's FTSE 100 fell 0.1% to 6,090.30 and France's CAC 40 dropped 0.2%.
Asian stocks climbed to a more than six-month high, led by Mitsubishi UFJ Financial Group Inc. and Toyota Motor Corp., after a Japanese government report showed the economy is improving and commodity prices rose.
The Morgan Stanley Capital International Asia-Pacific Index added 0.9% to 137.89 in late trade in Tokyo, the highest since May 15. Benchmarks in India and Indonesia rose to records.
Japan's Nikkei 225 Stock Average climbed 0.7% to 16,371.28.
The dollar rose slightly against other major currencies Wednesday, after a stronger-than-expected private sector employment survey raised speculation that a much-awaited US nonfarm payrolls report due later in the week may surprise on the upside.
In New York trading, the dollar was quoted at 114.89 yen, compared with 114.83 yen late Tuesday. The euro changed hands at $1.3298, from $1.3323.
The British pound traded at $1.9676, compared with $1.9735. The dollar changed hands at 1.1939 Swiss francs, compared with 1.1912 francs. The euro fetched 152.82 yen, compared with 153.02 yen.
Crude oil was little changed after an Energy Department report showed that US crude oil and fuel inventories fell.
Crude oil for January delivery fell 4 cents to $62.39 a barrel in late morning trade on the New York Mercantile Exchange. Futures are up 4.1% from a year ago.
Gold fell in New York for the second day in a row as a gain by the dollar against the euro reduced the metal's appeal as an alternative investment.
Gold, sold in dollars, generally moves in the opposite direction of the US currency, which climbed after a private report showed US companies in November added the most jobs since June. The metal is up 23% this year, while the dollar has fallen 10% against the euro.
Gold futures for February delivery fell 1.2% to $640.40 an ounce in morning trade on the Comex division of the New York Mercantile Exchange.