US stocks hit lowest levels in four months

MARKET OUTLOOK

- US: US markets registered their biggest drop in four months this week and remained under pressure, hurt by poor performance results and growing concerns about a possible credit crunch. All sectors lost ground, especially shares from materials, automobiles and components, real estate and utilities. Technically, most indexes are now close to support levels. The failure of those supports will lead to a further decline.

- EUROPE: European markets fell this week following the US stocks' decline as investor worries over the US housing market slowdown grew significantly. In Europe all sectors were under pressure, especially shares from basic resources, financial services and insurance. On a technical point of view, the risk remains on the downside and some new lows are favoured in the forthcoming days.

COMPANY PREVIEW

Danone (EUR 54.1 ; -3.79% ; BN ; DANO.PA)

On Tuesday, Danone is scheduled to announce 1H net income of E619.66m (E704m last year) on revenue of E6.71bln (E7.21bln). A week ago the Co hired banks to borrow E11bln to help finance its acquisition of Royal Numico. Separately, Danone is worried that a dispute with its Chinese partner Hangzhou Wahaha Group may hurt sales in the country.

Marathon Oil (USD 55.15 ; -9.97% ; MRO ; MRO.N)

In the US, Marathon Oil is seen reporting 2Q EPS of $2.08 ($2.05 last year) on the same day. The Co announced last week that it had completed projects adding bio diesel blended fuel at its Robinson and Champaign, Ill terminals. In other news, Marathon Oil has significantly narrowed the list of potential partners for an oil-sands venture that would allow the Co to process the heavy crude in its refineries.

Total (EUR 56.67 ; -4.71% ; FP ; TOTF.PA)

Thursday, Total will deliver 2Q net income of E3.05bln (E3.44bln a year ago). Last week, BP and Total said they wanted to restart pipelines that take jet fuel from refineries via Buncefield to Heathrow Airport. Separately, La Lettre de l'Expansion declared that Exxon Mobil is holding talks with Total over the sale of its stake in an oil refinery based in Dunkirk, France. In other news, Total was selected to build a petrochemical complex with a capacity of 1.4m metric tons per year in Algeria in partnership with Sonatrach.

AIG (USD 65.36 ; -5.33% ; AIG ; AIG.N)

American International plans to release 2Q earnings later on the same day. 2Q EPS seen at $1.61 ($1.44 last year). Last week, the Co was reprimanded by the SWX Swiss Exchange for violating the provisions of the Listing Rules and Directive on ad hoc publicity. Separately, the Co won approval to create a wholly owned subsidiary in China allowing it to expand property and casualty insurance operations.

Procter and Gamble (USD 62.82 ; 1.08% ; PG ; PG.N)

Finally, on Friday, Procter and Gamble may post 4Q EPS of $0.66 ($0.55 last year) on sales of $19.11bln ($17.84bln). In June, the Co agreed to sell its Japanese adult diaper division to Daio Paper. Procter and Gamble also announced its plan to build a $50m plant in central Poland to produce cosmetics (Gazeta Wyborcza).