ADR Report: Shares Edge Lower On Further Euro-Zone Loan Fears

International companies trading in New York closed lower Wednesday, trailing the broader markets, as debt worries over loans to euro-zone banks resurfaced.

The Bank of New York Index of ADRs dropped 0.2% to 117.89, weighed down by French banks and disappointing results in the technology sector.

Fitch Ratings said French banks are still more exposed to peripheral euro-zone countries than are other western European countries. "In terms of sovereign risk, exposure to Italy is significant and the most exposed French banks in absolute terms are BNP Paribas and Credit Agricole," the ratings agency said. Credit Agricole SA (CRARY, ACA.FR) shares fell 6.4% to $2.65, BNP Paribas SA (BNPQY, BNP.FR) lost 2.3% to close at $19.20, and peer Societe Generale SA (SCGLY, GLE.FR) slipped 3.6% to $4.31.

Jittery investors questioned how resilient the technology sector is after Oracle Corp. (ORCL) reported weak second-quarter results. The business-software giant said customers delayed purchases, causing sales in its core software business to grow less than expected and revenue in its newer hardware division to decline more than it had feared. Rival business-software makers also took a hit, with Germany's SAP AG (SAP, SAP.XE) tumbling 6.3% to $52.24.

The European index fell 0.3% to 110.05.

Teva Pharmaceutical Industries Ltd. (TEVA, TEVA.TV) predicted its earnings and sales would rise in 2012, aided by the introduction of new generic drugs that could help its U.S. business recover from recent weakness. But shares dropped 1.4% to $41.76 as the Israeli generic-drug company's forecast range left room to miss current Wall Street expectations. Teva's board also authorized the repurchase of up to $3 billion of its ordinary shares or American depositary shares over an expected three-year period, representing about 8% of outstanding shares.

Standard & Poor's lowered its outlook on Telefonica SA (TEF, TEF.MC) to negative from stable, noting "extremely fierce competition and intense price pressures" in the Spanish telecom market. Shares closed 1.1% lower at $16.96.

The Asian index closed 0.3% lower at 111.95.

Japanese authorities began a series of raids Wednesday as part of investigations into multibillion-dollar accounting irregularities at Olympus Corp. (OCPNY, 7733.TO), the country's biggest corporate scandal in years. Olympus said its offices--including its headquarters building in central Tokyo--were raided by Japanese prosecutors, police and securities regulators. Shares dropped 6.6% to $13.35.

Chinese stocks finished lower on concerns about the nation's slowing economy. Technology companies Baidu Inc. (BIDU, K3SD.SG) and Changyou.com Ltd. (CYOU, K3JD.SG) were among the biggest losers. Baidu shares slipped 4.6% to $112.97 and Changyou declined 4.3% to $22.70.

The Latin American index gained 0.2% to 329.55, and the emerging-markets index edged fractionally lower to 271.87.

Shareholders of Chilean flagship carrier LAN Airlines SA (LFL, LAN.SN) approved a merger with Brazil's TAM SA (TAM, TAMM4.BR), bringing the companies one step closer to creating Latin America's largest airline, dubbed Latam. LAN shares climbed 0.8% to $23.87 and TAM advanced 0.5% to $20.26.

Gold futures ended a touch lower as traders weighed the impact of the European Central Bank's liquidity injection and looked ahead to the season's holidays. That caused shares of South African miners to slip: Gold Fields Ltd. (GFI, GFI.JO) fell 1% to $15.47, Harmony Gold Mining Co. (HMY, HAR.JO) dropped 0.7% to $12.01, and AngloGold Ashanti Ltd. (AU, ANG.JO) slipped 0.6% to $42.34.

-By Ian Thomson, Dow Jones Newswires; 212-416-2314; [e-mail]