European stocks fell for a second straight week, led by technology and financial companies, as Intel Corp cut its profitability forecast and Warren Buffett said the "party is over" for insurers.
STMicroelectronics NV, Europe's largest semiconductor maker, had its biggest weekly drop since December 2002 as Intel said flash-memory prices will fall about twice as fast this quarter as predicted. Allianz SE and Axa SA slumped after billionaire investor Buffett said profit margins for insurers will drop "significantly." UBS AG sank on speculation that Europe's largest bank will announce further writedowns.
The Dow Jones STOXX 600 Index dropped 3.4 percent to 307.98, the biggest weekly retreat in a month. The regional gauge has declined 16 percent this year on concern that the collapse of US subprime mortgages and a slowdown in the world's largest economy will curb profit growth in Europe.
"The earnings outlook is clouded for a lot of companies," said Job Curtis, who helps manage about US$2.2 billion at Henderson Global Investors in London. "The jury is still out on the US economy."
Analysts have cut their profit growth estimates for this year for companies in the STOXX 600 to 3.3 percent from 11 percent at the end of last year, estimates compiled by Bloomberg show.
Banks and securities firms globally have posted losses exceeding US$188 billion since the start of last year as the impact of defaults on subprime mortgages rippled through financial markets.
The US government on Friday reported an unexpected loss of 63,000 jobs last month, defying economists' forecasts for a gain of 23,000.
Germany's DAX declined 3.5 percent for the week, while France's CAC 40 lost 3.6 percent and the UK's FTSE 100 fell 3.1 percent.
The STOXX 50 retreated 4.1 percent, while the Euro STOXX 50, a measure for the euro region, sank 4 percent.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$10.26 billion to finance the construction of its second fab in Kumamoto, Japan, and a second fab in Arizona, using advanced process technologies. The Department of Investment Review approved TSMC’s investment applications on the basis that Taiwan remains a major technology and manufacturing hub for the chipmaker, which makes its most advanced chips at home, the company operates its research-and-development center here and the majority of its capacity remains in Taiwan. The latest capital injections — US$5.26 billion for its Japanese venture Japan Advanced Semiconductor Manufacturing
DIVERSIFYING: Following customers’ demand to improve supply chain resilience, ASE is looking for sites in the US, Japan and Mexico, a company executive said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it plans to launch a new high-end chip testing fab in the US next month to better serve its key customers based in North America, particularly California-based artificial intelligence (AI) customers. The new US testing facility would be operated by the firm’s subsidiary ISE Labs Inc, it said. ASE’s major customers, and high-ranking US officials and representatives from American Institute in Taiwan are to attend the fab’s opening ceremony on July 12, it said. ISE Labs last year acquired a 5,942m2 facility in San
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Taiwanese workers earned an average of NT$47,000 per month this year, but 40 percent are struggling financially and 18 percent plan to switch jobs within 12 months, two separate surveys showed yesterday. The amount equals a 5.4 percent increase from a year earlier to a decade high, 104 Job Bank (104人力銀行) said. The government is due to review the nation’s minimum wages. Employees at computer and consumer electronics manufacturers reported the highest average monthly wage of NT$60,000 a month, followed by semiconductor firms at NT$59,000, and vendors of shoe and textile products, along with software and Internet businesses at NT$55,000, 104 Job