TA-25 follows global markets lower but Wall Street rebounds

Israeli stocks retreated for a second day, tracking a global slump triggered by concern the US, the world's largest economy, may be headed for a slowdown.

SHARES TEL AVIV Israeli stocks retreated for a second day, tracking a global slump triggered by concern the US, the world's largest economy, may be headed for a slowdown. Bank Hapoalim Ltd., Israel's largest lender and Israel Discount Bank Ltd., the third biggest, paced the drop. The TA-25 Stock Index lost 17.71, or 1.8 percent, to 955.88, the biggest one-day drop in more than two weeks, as all of the measure's members slid. Investors bought and sold about NIS 1.68 billion shekels in shares and convertibles. US subprime mortgage delinquencies rose to a four-year high in the fourth quarter, a report showed in late trading Tuesday. Stocks in the US plunged on the report, wiping out three days of gains. Asian stocks slumped Wednesday. "Financial stocks are the target of this global sell-off, due to the crisis in the US subprime mortgage market," Clal Finance Batucha Investment Management Ltd. wrote in its morning note to investors. Shares of Hapoalim declined NIS 0.23, or 1.2%, to NIS 18.92. Discount Bank dropped NIS 0.18, or 1.9%, to NIS 9.54. Elbit Systems Ltd. lost NIS 3.80, or 2.6%, to NIS 141. Israel's biggest non-state defense company on Wednesday reported fourth-quarter profit of $24m. and said gross profit dropped to 21.4% of sales from 24.4% because of the "negative impact" of its unit Elisra Electronics Systems Ltd. IDB Holding Corp. dropped NIS 1.70, or 1.4%, to NIS 124.10. The holding company, which has investments ranging from finance to mobile phones, denied a report in Ma'ariv that one of its insurance units is in talks to buy an eastern European bank. Koor Industries Ltd. tumbled NIS 7.40, or 3.2%, to NIS 223. The company, with interests in agrochemicals and telecommunications equipment, posted a loss in the fourth quarter after taking charges at its Makhteshim Agan Industries Ltd. unit. Net loss was NIS 55.3m., compared with net income of NIS 112.1m. a year earlier. Shares of Makhteshim tumbled NIS 0.71, or 2.8%, to NIS 24.30. The shares dropped 2.5% Tuesday after the world's largest maker of generic agrochemicals posted a fourth-quarter loss on charges for a lawsuit and cutting jobs. Bank Leumi Le-Israel Ltd. dropped NIS 0.26, or 1.7%, to NIS 14.88. The Tel Aviv District Attorney's office filed indictments Wednesday against the country's second-largest lender and its officials, on claims they offered illegal benefits to advisers who sold the lender's mutual funds. WALL STREET US stocks closed in positive territory Wednesday after a volatile session that traders described as technically-driven and tested by more evidence of the meltdown in the subprime mortgage market. The Dow Jones Industrial Average dropped below 12,000 in intraday action, but managed to close well above that level, up 57.44 points, or 0.5%, at 12,133.40. Earlier it fell by over 130 points as it broke through the 12,000 level for the first time in four months. The S&P 500 closed up 9.22 points at 1,387.17, while the Nasdaq Composite gained 21.17 points to 2,371.74. EUROPE European stocks had the biggest decline since last month's global equity sell-off. The Dow Jones Stoxx 600 Index slid 2.7% to 351.93 at the close in London, with all 18 industry groups falling. The Stoxx 50 slid 2.9% and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, declined 2.8%. National benchmarks fell in all 18 western European markets. The UK's FTSE 100 dropped 2.6% to 6,000.70, Germany's DAX slid 2.7% and France's CAC declined 2.5%. ASIA Asian stocks fell, resuming a sell-off that halted last week. The Morgan Stanley Capital International Asia-Pacific Index lost 2.5% to 140.37 at 7:32 p.m. in Tokyo. Japan's Nikkei 225 Stock Average skid 2.9% to 16,676.89 and the broader Topix index also lost 2.9%. Benchmarks elsewhere slid more than 1%, except in Thailand and Pakistan. In China, which triggered the recent slide, the Shanghai and Shenzhen 300 Index dropped 1.6%. CURRENCY In New York trading, the dollar was quoted at 116.17 yen, compared with 116.31 yen late Tuesday. The euro stood at $1.3234, compared with $1.3196. COMMODITIES April crude futures rose 23 cents to close at $58.16 a barrel on the New York Mercantile Exchange. Gold for April delivery fell 1.1%, or $6.90, to close at $642.60 an ounce on the Comex division of the NYMEX.