Global stocks take a dive

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April 18: Stocks slumped worldwide, extending last week’s decline, as concern deepened that profit growth is waning. Japan’s Nikkei 225 Stock Average had its biggest drop in 11 months and benchmarks in Europe erased 2005 gains.

Royal Philips Electronics NV slid after the company posted first-quarter earnings that missed estimates. Sony Corp. fell as its mobile-phone unit said profit plunged. Altria Group Inc. and Pfizer Inc., which announce earnings this week, were among 25 Dow Jones Industrial Average stocks that slipped in Europe.

The Morgan Stanley Capital International World Index, a global equity benchmark, fell 0.9% at 1:21 p.m. in London, its fifth successive decline. The Nikkei tumbled 3.8%, dropping below 11,000 for the first time in four months. The Dow Jones Euro Stoxx 50 Index slid as much as 2.7%, losing its gain for the year.

Earnings shortfalls at companies including International Business Machines Corp. combined with slower economic growth forecasts and a disappointing retail sales report in the US last week to trigger a sell-off in equities. The Dow Jones Industrial Average had its biggest drop in almost two years on the final day of trading last week.

As stocks slumped, bonds rose as investors sought the relative safety of government debt. US 10-year notes extended gains after having their biggest weekly advance in eight months last week. European bonds, including the benchmark German bund due January 2015, also advanced.

Emerging-market stock also declined. The MSCI Emerging Markets Index, which includes 732 stocks in countries such as Taiwan, Russian and Brazil, fell 2 percent, adding to a 3.5% slump last week.

The MSCI World dropped 2.6% last week, its biggest weekly slide since the week ended April 30, 2004. The Euro Stoxx 50, a benchmark for the 12 countries sharing the euro, is 0.4% higher in 2005 after earlier today being down as much as 0.7%. It has slipped 4.9% since reaching its high for the year on March 7. Germany’s DAX Index today declined 1.9%, also erasing its gain for 2005. Japanese stocks were also hurt as anti-Japan protests spread to about a dozen cities in China, the country’s biggest trading partner, over territorial and historical disputes.

Among other equity benchmarks that fell today, the MSCI Asia-Pacific Index, which measures 945 stocks, lost 3%.