ADR Report: Shares End Mixed Amid Renewed Fiscal Cliff Concerns

   By Anna Prior 
 

International companies trading in New York closed mixed Tuesday as renewed worries about the so-called "fiscal cliff" in the U.S. and a downgrade of France's credit rating, overshadowed positive U.S. new residential construction data and reports that Israel and Hamas were nearing a cease-fire deal.

The Bank of New York index of ADRs edged down 0.1% to 124.58. U.S. Federal Reserve Chairman Ben Bernanke said the central bank wouldn't have "infinite" ability to address the economic fallout that would result from a failure by lawmakers to reach a compromise in fiscal talks.

Meanwhile, France's finances were in the spotlight after Moody's Investors Services late Monday cut the country's sovereign-credit rating by one notch to Aa1 and kept the outlook negative, expressing concern about France's uncertain fiscal outlook.

The European index was essentially flat at 118.46.

Deutsche Bank AG (DB, DBK.XE) plans to cut 500 jobs at its subsidiary Sal. Oppenheim jr. & Cie. AG & Co. KGaA in the coming year as part of its plan to slim operations at the private bank, German newspaper Sueddeutsche Zeitung on Tuesday reported in the advance release of an article to be published Wednesday. Shares of the German bank slid 1.5% to $42.59.

ARM Holdings PLC (ARMH, ARM.LN) received a downgrade from Raymond James, which cut its rating on the shares to outperform from strong buy, although it raised its price target to $38 from $36 and said the revision is not driven by estimate concerns. The firm cited the stock's recent run and relative valuation versus other high-profile secular growth stories as the reason for the downgrade, while also saying in a note to clients that it sees fewer relative catalysts near term. Shares of the U.K.-based microchip designer fell 3.6% to $34.46.

France's Carrefour SA (CRRFY, CA.FR) said Tuesday it is selling its 60% stake in Carrefour Indonesia to local partner CT Corp. for 525 million euros ($672.7 million), as the French retail giant moves to refocus on core European operations. Shares rose 3.1% to $4.72.

The Asian index fell 0.7% to 119.76.

Trina Solar Ltd. (TSL, K3KD.SG) widened its third-quarter loss as the Chinese solar-products maker saw its margins hammered by a double-digit revenue decline, although input costs slid as well. Results missed Wall Street estimates and the company also cut its shipments estimate for the year. Shares fell 8.8% to $2.19.

ShangPharma Corp.'s (SHP) third-quarter miss and full-year top-line target cut comes as the small Chinese drug-research outsource firm dealt with "industry headwinds and R&D-budget fluctuations," noted CEO Michael Xin Hui. Still, he said that the company's "top customers have been especially keen to expand their scale and scope of business with us" in areas such as chemistry and biologics, "and we believe that demand will be even stronger next year." The company also plans to reduce capital-spending and administrative costs to boost margins, which slumped in the third-quarter as expenses rose faster than revenue. Shares, which slid 6.3% on Monday, bounced back, rising 7.1% to $7.77.

The Latin American index rose 0.1% to 309.85 and the emerging markets index fell 0.3% to 271.26.

Shares in Brazil's state-controlled utility Centrais Eletricas Brasileiras SA (EBR, ELET6.BR), known as Eletrobras, continued to clump as the firm is emerging as one of the clearest losers in the government's drive to bring down electric power prices. The administration will renew power utility licenses that start expiring in 2015 but only if the concessionaires agree to major revenue cuts. Eletrobras won't have a choice, as the government is its major shareholder and the board of directors has recommended renewing concessions. The firm estimates it will lose close to 10 billion Brazilian reais ($4.8 billion) in annual revenue as a result. U.S.-listed shares, which fell nearly 15% on Monday, ended the day down 5.8% to $3.57.

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