Stocks: Thursday’s review

Japanese stocks fell as weaker exports and a shrinking German economy added to concern the global economy is slowing.

Germany’s gross domestic product contracted about 0.25 percent in the fourth quarter from the previous three months, the government said yesterday, adding to signs Europe’s largest economy may be on the brink of recession.

Canon Inc., a camera maker that gets a third of its revenue in Europe, fell 0.9% after a report Japan’s trade surplus narrowed on a stronger yen and weak overseas demand.

Brokerages led declines after Nomura Holdings Inc. said individual investors are buying fewer stocks.

Komatsu Ltd., a construction machinery maker that relies on China for 23% of its sales, rose 2.7% after slowing mainland inflation raised expectations the government will take action to encourage growth.

European stocks declined after reports that showed U.S. retail sales and initial jobless claims missed economists’ forecasts outweighed lower borrowing costs at Spanish and Italian debt auctions.

Spain auctioned 9.98 billion euros ($12.7 billion) of bonds maturing in 2015 and 2016, including a new three-year benchmark security, twice the maximum target of 5 billion euros set for the sale. The yield on the three-year notes was 3.384 percent, compared with 5.187 percent when the nation sold similar notes in December.

Italy sold 12 billion euros of Treasury bills, meeting its target, and its borrowing costs plunged. The Rome-based Treasury sold 8.5 billion euros one-year bills at a rate of 2.735 percent, down from 5.952 percent at the last auction.

The European Central Bank kept the benchmark interest rate at a record low of 1%, as predicted.

Tesco Plc dropped 16%, leading retail shares lower, after the U.K.’s largest supermarket chain said it was “disappointed” with holiday sales.

Delhaize dropped 11%. The owner of Food Lion supermarkets plans to cut about 5,000 positions and expects a 2.4 percent drop in revenue as it closes stores in the U.S. and Europe. Costs related to the closures will hurt earnings by about 205 million euros starting in the first quarter, the Brussels-based company said.

Vestas lost 7.1%. The biggest wind- turbine maker said it’s cutting 2,335 jobs worldwide and a further 1,600 posts are at risk in the U.S. this year as a tax credit expires.

RBS advanced 5.6%. Britain’s biggest government-owned lender will cut 3,500 jobs at its investment bank over the next three years as it exits its unprofitable cash equities and mergers advisory operations.

UniCredit (UCG) SpA climbed 14%. The stock was raised to “buy” from “neutral” at Citigroup Inc., which said the stock would suit a high-risk investment strategy as it offers significant “upside potential.”

U.S. stocks rose as a drop in borrowing costs at debt auctions in Europe overshadowed disappointing data on American jobless claims and retail sales.

Stocks rose as Spain sold 10 billion euros ($13 billion) of bonds, twice the target for the sale, while Italy sold 12 billion euros of bills, easing concerns the countries would struggle to finance their debts. European Central Bank President Mario Draghi said the bank has averted a serious credit shortage and there are signs the economy is stabilizing.

Stocks fell earlier as jobless claims climbed by 24,000 to 399,000 in the week ended Jan. 7, compared with a median estimate of 370,000.  U.S. retail sales rose 0.1% in December cs cons. +0.3%.