Tel Aviv-25 Index falls

Bank Hapoalim Ltd. fell to the lowest in seven weeks, retreating NIS 0.46, or 3%, to NIS 14.97.

SHARES TEL AVIV The Tel Aviv-25 Index declined the most in two weeks, falling 12.29, or 1.1 percent, to 1,115.21 at the close in Tel Aviv, as 19 shares dropped, five gained and one was unchanged. Investors traded about NIS 2.16 billion in shares and convertible securities on the Tel Aviv Stock Exchange. ADO Group Ltd. gained the most in seven days, advancing NIS 0.04 shekel, or 2.9%, to NIS 1.28. The real estate company agreed to buy a controlling stake in Asim Investments Ltd. Asim, which invests in properties in Israel and abroad, soared NIS 0.01, or 6.2%, to NIS 0.19. Bank Hapoalim Ltd. fell to the lowest in seven weeks, retreating NIS 0.46, or 3%, to NIS 14.97. Israel's biggest bank by assets will lose more fee income than any other lender after a law regulating bank charges comes into effect July 1, a Hebrew daily reported, citing data provided by lenders to the Bank of Israel. Delek Real Estate Ltd. gained the most in a month, increasing NIS 0.52, or 6.5%, to NIS 10.12. The property company controlled by Israeli billionaire Yitzhak Tshuva reached a settlement with the Swiss real-estate company Jelmoli Holding AG. Tao Tsuot Ltd. surged the most since October, advancing NIS 0.03, or 8.1%, to NIS 0.36. The investment company said it's in talks to sell its stake in Manhattan's "Lipstick'' building. WALL STREET US stocks rose, led by banks, on speculation weaker consumer confidence and a record drop in home prices will persuade the Federal Reserve to hold off on interest rate increases. Citigroup Inc., JPMorgan Chase & Co. and Bank of America Corp. helped financial shares rebound from a five-year low as traders increased bets that the Federal Reserve will leave borrowing costs unchanged until at least September. D.R. Horton Inc. led a rally in homebuilders after Credit Suisse Group said the industry may recover next year. United Parcel Service Inc.'s steepest drop in two years limited the market's advance after the world's largest package-delivery company said rising fuel costs and a weakening economy will hurt earnings. The Standard & Poor's 500 Index added 3.69 points, or 0.3%, to 1,321.69 in afternoon trading in New York after earlier dropping as much as 1%. The Dow Jones Industrial Average increased 23.77, or 0.2%, to 11,866.13. The Nasdaq Composite Index gained 4.95, or 0.2%, to 2,390.69. "If they raise rates, they're going to choke off whatever economic recovery could happen in the second half of 2008 or in 2009," Michael Cuggino, president of Pacific Heights Asset Management LLC in San Francisco, which oversees $3.3 billion, said in an interview with Bloomberg Radio. "I like the financials in the long-term, but you do have to have a strong stomach.'' Benchmark indexes opened lower after the S&P/Case-Shiller home-price index posted its biggest decline since the group began keeping year-over-year records in 2001 and extended declines when the New York-based Conference Board's confidence index slumped more than forecast. The retreat was reversed as S&P 500 financial shares rallied 2.1% as a group, their biggest advance in almost two months. EUROPE European stocks fell for a fifth day as higher oil prices and weakening consumer confidence in Germany weighed on carmakers, airlines and retailers, while a drop in mortgage approvals pushed UK homebuilders lower. Daimler AG, the world's second-largest maker of luxury cars, and Ryanair Holdings Plc declined after oil rose for a third day. "The global economic environment is strongly deteriorating with rising raw-material costs and inflation," said Matthieu Giuliani, a fund manager at Palatine Asset Management in Paris, which oversees $9.5 billion. "It's a snowball effect. The outlook for earnings will be revised lower.'' The Dow Jones Stoxx 600 Index lost 0.8% to 292.54, after touching 289.65, the lowest since October 2005. France's CAC 40 dropped 0.8%, as did Germany's DAX. The UK's FTSE 100 slipped 0.6%. Stocks extended declines after a US report showed consumer confidence fell more than forecast this month to the lowest level in more than 16 years. Earlier, speculation Iran's nuclear facilities had been attacked also weighed on shares. Iran denied the "rumor'' of an attack, Reuters reported, citing a senior nuclear official, whom it didn't name. The US has no knowledge of an attack, Lieutenant Stephanie Murdock, a Fifth Fleet spokeswoman, said. A spokesman for the Israel Defense Forces said the army wasn't aware of any incident involving Iran. "The market fell on a rumor of an attack on an Iranian nuclear installation," said Marie-Caroline Messager, senior equities manager at Newedge in London. "Oil prices increased in the wake of this rumor.'' The Stoxx 600 has retreated 9.2% so far this month. Record oil prices have stoked concern rising inflation will keep policy makers from cutting borrowing costs, while credit-related losses approaching $400 billion stifle economic growth. The index is down 27% from a six-year high reached a year ago. ASIA Asian financial stocks fell after Goldman, Sachs & Co. advised selling banks as credit losses widen and Lehman Brothers Holdings Inc. said the parent of Japan's largest consumer-finance company may be insolvent. The MSCI Asia Pacific Index dropped 0.2% to 138.35 in Tokyo, extending a three-day, 4% decline. Financial companies have led the sell-off among the benchmark's 10 groups in the past month on speculation credit-related losses will mount and after Moody's Investors Service stripped bond insurers MBIA Inc. and Ambac Financial Corp. of their Aaa ratings. "We're seeing global selling of financials," said Michael Birch, who helps manage the equivalent of $140 million at Wallace Funds Management in Sydney. "Downgrades to mortgage insurers' ratings in the last few days, coupled with persistent requirements for capital, have led to further pressure.'' Japan's Nikkei 225 Stock Average lost 0.1% to 13,849.56. Toyota Motor Corp., the world's second-largest automaker, declined after saying it may cut its 2008 sales forecast as demand in the US slumps. Most other benchmark indexes in Asia retreated. Pakistan's main equity index surged the most in more than six years after the exchange cut the daily limit for a stock to fall to 1% from 5% and banned short-selling. CURRENCY The shekel fell for a second day against the dollar, retreating 0.1% to 3.37, from 3.37 the day before. The US dollar fell 0.5% to $1.55 per euro in afternoon trading in New York, from $1.55 a day earlier. It touched $1.60 on April 22, the weakest level since Europe's currency debuted in 1999. The dollar traded at 107.88 yen, compared with 107.85. Japan's currency dropped 0.5% to 168.18 per euro, from 167.35. It touched 168.38, the weakest level since July 23. COMMODITIES Crude oil fell after Royal Dutch Shell Plc said that it resumed production at its Nigerian Bonga field that was attacked last week. Shell shut Bonga output June 19 after militants attacked the production vessel at the deepwater field 120 kilometers (75 miles) off the coast of Nigeria. Nigeria was overtaken by Angola in April as Africa's biggest oil producer because attacks reduced the country's output. Crude oil for August delivery fell 36 cents, or 0.3%, to $136.38 a barrel in afternoon trading on the New York Mercantile Exchange. Prices touched $138.75 earlier in the day, the highest since reaching a record $139.89 on June 16. Gold rebounded on speculation the Federal Reserve is unlikely to raise US borrowing costs anytime soon, weakening the dollar and boosting the appeal of the metal as an alternative investment. Gold futures for August delivery rose $5.60, or 0.6 percent, to $892.80 an ounce at 11:38 a.m. on the Comex division of the New York Mercantile Exchange. The price fell 1.8 percent yesterday after gaining 3.5 percent last week.