Subprime scares lead TASE

The TA-25 Index lost 9.15, or 0.9 percent, to 1,072.25 at the close in Tel Aviv. The measure was down as much as 2.2% earlier in the day.

SHARES TEL AVIV Israeli stocks retreated for a second day Wednesday, following global indexes lower on concern the US subprime mortgage rout is spreading. Africa Israel Investments Ltd. and Delek Group Ltd. led the decline. The TA-25 Index lost 9.15, or 0.9 percent, to 1,072.25 at the close in Tel Aviv. The measure was down as much as 2.2% earlier in the day. Investors traded about NIS 1.87 billion of shares and convertibles. "Markets overseas are all falling because of concern the subprime crises will continue," Amihai Bombach, head of research at Psagot Ofek Investment House Ltd., said by telephone from Tel Aviv. "Holding companies are leading declines today because they'll have to put plans of share and bond offerings on hold." Africa Israel, a holding company and real-estate developer, dropped NIS 9, or 2.6%, to NIS 338.50. Delek Group, a holding company with stakes in energy and real estate, fell NIS 29.10, or 2.9%, to NIS 961.90. Africa Israel said yesterday it will raise NIS a bond offering. Delek Global Real Estate, a unit of Delek, plans to list on the London Stock Exchange in April 2009, the company's CEO said in an August 7 interview. Orckit Communications Ltd. tumbled NIS 4.65, or 13%, to NIS 30.70. The telecommunications equipment developer reported a second-quarter net loss of $6.4 million, compared with net income of $294,000 in the same period last year, according to a statement distributed by PRNewswire. Ormat Industries Ltd. dropped NSI 0.42, or 0.8%, to NIS 52.67. The second-largest operator of geothermal power plants in the US said second-quarter profit slumped 90% to $9.1m. from a year ago. Tower Semiconductor Ltd. fell NIS 0.65, or 9%, to NIS 6.39. The maker of custom chips dropped the most in almost three years after it reported a bigger second-quarter loss than some analysts predicted and forecast slower sales growth. XTL Biopharmaceuticals Ltd. lost NIS 3.3, or 4.7%, to NIS 68. The developer of treatments for neuropathic pain said its first-half loss widened to $14.6m. from $7.3m. a year ago, on costs related to the licensing of the Bicifadine drug. WALL STREET Stocks gained after Coventree Inc. said it found buyers for asset-backed debt, spurring speculation financial firms can recover from a credit crunch. Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. led the Standard & Poor's 500 Index higher for the first time in three days. The S&P 500 rose 10.92, or 0.8%, to 1,437.46 as of morning trading in New York. The Dow Jones Industrial Average climbed 50.4, or 0.4%, to 13,079.32, while the Nasdaq Composite Index increased 17.69, or 0.7%, to 2,516.81. EUROPE Stocks dropped for a second day, led by banks on concern losses from the subprime-mortgage problem will hurt earnings. UBS AG and Deutsche Bank AG led the decline after analysts downgraded the shares, saying tougher financing conditions will hurt profit. BHP Billiton Ltd., the world's biggest mining company, and Rio Tinto Group, the third-largest, fell as copper prices retreated. The Dow Jones Stoxx 600 Index lost 0.3% to 365.21 as of 3:55 p.m. in London. The measure has fallen 8.8% since reaching its high for the year June 1 on concern that defaults among US borrowers with the poorest credit profiles may spill over to other markets, erode economic growth, stall takeovers and hurt the value of investments. National benchmarks fell in all 14 Western European markets that were open except Switzerland and Germany. The UK's FTSE-100 dipped 0.6% to 6,106.50. France's CAC-40 declined 0.6% to 5,444.12 and Germany's DAX lost 0.5% to 7,386.2. Markets in Austria, Luxembourg, Greece and Italy were closed for a holiday. The Stoxx 50 lost 0.1% and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, retreated 0.4%. ASIA Stocks slumped to a three-month low, led by Mitsubishi UFJ Financial Group Inc. and Sumitom Mitsui Financial Group Inc., after the banks reported losses on investments related to US subprime loans. Mitsubishi UFJ and Sumitomo Mitsui, two of Japan's biggest lenders, slid to two-year lows. Toyota Motor Corp. and Westfield Group, which has 59 shopping malls in the US, dropped after Wal-Mart Stores Inc. cut its profit forecast, adding to evidence consumer spending is cooling in the world's biggest economy. The Morgan Stanley Capital International Asia-Pacific Index lost 2.3% to 145.89 at 6:19 p.m. in Tokyo, set for the lowest close since May 1. About 20 stocks fell for each that rose. The MSCI Asia-Pacific Financials Index slumped 3.2%, the biggest decline among the measure's 10 industry groups. Japan's Nikkei 225 Stock Average slid 2.2% to 16,475.61, halting a two-day advance. Matsushita Electric Industrial Co. slumped to a 22-month low after Nokia Oyj offered to replace up to 46 million mobile-phone batteries produced by the company on concern they will overheat. CURRENCY The shekel was trading at a Bank of Israel fixing of 4.2100 at 6:30 p.m. in Tel Aviv. The dollar made gains against its European rivals early Wednesday but continued to lose ground against the yen, as traders reacted to a slight rise in the US stock market. The dollar was down 0.1% against the yen at 117.3 yen. The euro was down 0.3% at $1.3493, while the British pound was down 0.07% at $1.9936. COMMODITIES Energy futures rose sharply Wednesday, led by strong gains in natural gas, continuing to draw support from worries over the potential impact of a tropical storm on oil installations in the Gulf of Mexico. Crude oil for September delivery rose 75 cents, or 1%, at $73.13 a barrel on the New York Mercantile Exchange. Gold futures edged lower Wednesday, as the dollar's continuing strength against most other major currencies and global equity market declines squeezed demand for the precious metal. Gold for December delivery fell $1.60 to $678.10 an ounce on the NYMEX.(