Stocks: Wednesday’s review

Asian stocks fell for a second day amid concern shares rose too fast in a three-week rally that drove the regional benchmark index to a 19-month high. Chinese developers declined.

Nikkei 225 12,239.66 -75.15 -0.61%

Hang Seng 22,556.65 -333.95 -1.46%

S&P/ASX 200 5,092.4 -25.47 -0.50%

Shanghai Composite 2,263.97 -22.64 -0.99%

China Overseas Land & Investment Ltd., the biggest builder traded in Hong Kong, sank 2.7 percent after a report the southern city of Shenzhen banned developers from raising new home prices.

Canon Inc., the world’s largest camera maker, slipped 2.8 percent as the yen strengthened, cutting the overseas earnings outlook for Japan’s exporters.

National Australia Bank Ltd. lost 1.9 percent as the country’s largest lender by assets announced cost cuts after full-year profit fell for the first time since 2009.

Most European stocks declined as earnings reports from Inditex SA to Enel (ENEL) SpA offset an increase in U.S. retail sales by the most in five months.

The Stoxx Europe 600 Index (SXXP) slipped less than 0.1 percent to 295.32, as four shares retreated for every three that advanced.

A report from the European Union’s statistics office earlier today showed industrial production in the euro area fell 0.4 percent in January, adding to signs that the region’s recession extended into the first quarter. The median economist forecast was for a 0.1 percent decline.

National benchmark indexes declined in 10 of the 18 markets in western Europe.

FTSE 100 6,481.5 -29.12 -0.45% CAC 40 3,836.04 -3.93 -0.10% DAX 7,970.91 +4.79 +0.06%

Inditex (ITX) dropped 2.6 percent to 105.65 euros in Madrid. The retailer reported a 12 percent decline in net income to 705 million euros in the three months through January. The average of analyst forecasts called for 716 million euros.

Enel fell 6 percent to 2.61 euros, the lowest price since August. The utility reported 2012 net income to 865 million euros and said earnings won’t recover until 2017 as taxes and weakening power demand in its biggest markets crimp growth.

Commerzbank AG tumbled 9.7 percent to 1.26 euros, the sharpest decrease in 15 months, after Germany’s second-biggest lender announced a 2.5 billion euros ($3.3 billion) share sale to repay investments by a German government fund and Allianz SE.

ASM International NV lost 10 percent to 27.85 euros, the biggest drop since November 2008. The maker of semiconductor equipment announced plans to sell a stake of as much as 12 percent in ASM Pacific Technology Ltd. in an effort to increase the value of its combined businesses.

Prudential advanced 9.3 percent to 1,125 pence, its highest price since January 2000, after the biggest U.K. insurer by market value raised its 2012 dividend 16 percent to 29.19 pence a share. The company reported a 25 percent increase in operating profit to 2.53 billion pounds in 2012, beating the average analyst estimate of 2.32 billion pounds.

Indexes started the session in a small minus, but managed to complete trades slightly above zero.

U.S. stocks fluctuated between gains and losses, after an eight-day rally drove the Dow Jones Industrial Average to record highs, amid data that showed retail sales increased in February by the most in five months.

With consumers shrugging off the impact of higher payroll taxes, the Commerce Department released a report on Wednesday showing that U.S. retail sales increased by much more than expected in the month of February.

The Commerce Department said retail sales surged up by 1.1 percent in February after edging up by an upwardly revised 0.2 percent in January.

Economist had been expecting sales to increase by about 0.5 percent compared to the 0.1 percent growth originally reported for the previous month.

The stronger than expected retail sales growth was partly due to a rebound in sales by motor vehicle and parts dealers, which jumped by 1.1 percent in February after dipping by 0.3 percent in January.

Excluding the increase in auto sales, retail sales still rose by 1.0 percent in February compared to a 0.4 percent increase in January.

Gas stations sales also showed a substantial increase, surging up by 5.0 percent in February amid higher prices for gasoline. The jump came on the heels of a 0.7 percent increase in the previous month.

While higher auto and gas sales played a big part in the bigger than expected increase in retail sales, sales still rose by 0.4 percent when excluding both auto and gas sales, exceeding economist estimates.

Import prices in the U.S. rose by much more than expected in the month of February, according to a report released by the Labor Department on Wednesday, with the price growth largely due to a jump in fuel import prices.

The Labor Department said import prices rose by 1.1 percent in February following a 0.6 percent increase in January. Economists had been expecting import prices to increase by 0.6 percent.

The bigger than expected increase in import prices in February was largely due to a 4.9 percent jump in prices for fuel imports, which came on the heels of a 2.6 percent increase in January.

Excluding the increase in prices for fuel imports, import prices came in unchanged in February compared to a 0.2 percent increase in the previous month.

The report also showed that export prices rose by 0.8 percent in February after edging up by 0.3 percent in the previous month. Export prices had been expected to inch up by 0.2 percent.

Business inventories in the U.S. increased by much more than economists had expected in the month of January, the Commerce Department revealed in a report on Wednesday, although the report also showed a drop in business sales.

The report showed that business inventories rose by 1.0 percent in January following a revised 0.3 percent increase in December.

Economists had expected inventories to increase by 0.5 percent compared to the 0.1 percent growth originally reported for the previous month.

The bigger than expected increase was partly due to notably higher inventories at retailers and merchant wholesalers, which jumped by 1.5 percent and 1.2 percent, respectively. Inventories at manufacturers also rose by 0.5 percent.

Components of DOW index closed mixed. Shares of International Business Machines Corp. (IBM, +0.78%) advanced more than other components. Shares of Merck & Co. Inc. (MRK, -1.12%) fell more than other components

Most sectors of the S&P closed in plus. Most growts showed services sector (+0.4%). Most fell showed basic materials sector (-0.8%).

At the close:

Dow +5.07 14,455.13 +0.04%

Nasdaq +2.8 3,245.12 +0.09%