Brazil stocks tumble on investor jitters

SAO PAULO, May 7 (BestGrowthStock) – Brazilian stocks dropped in
early trading on Friday, underscoring investor wariness after
equities tumbled around the world in the previous session.

The benchmark Bovespa stock index (.BVSP: ) fell nearly 2
percent to 62,195.60, swinging within a wide band from positive
to negative territory.

Stocks around the world dropped and riskier currencies
weakened sharply on Thursday. The losses came as investors
worried that sovereign debt problems in some euro-zone
countries could spill over to larger economies.

The Bovespa index lost 2.31 percent in the previous
session, after dropping as much as 6.42 percent intraday.

“We’re of the view that we’re in for a much sharper
adjustment,” said Paul Biszko, senior strategist at RBC Capital
Markets in Toronto. “Things have just gotten so stretched. A
lot of investors have become misguided, thinking markets are
just back to the old days of moving one way.”

A jump in U.S. April employment numbers brightened the
outlook for the world’s largest economy. U.S. employment grew
at the fastest pace in four years in April as private sector
businesses ramped up hiring. For details, see [ID:nN06115059]

Brazil’s currency, the real (BRBY: ), weakened 0.11 percent
to 1.853 per dollar, as the greenback gained against a basket
of major currencies (.DXY: ). The dollar, viewed as a safe haven,
surged in the volatile trading Thursday.

On the Bovespa, state-controlled energy giant Petrobras
(PETR4.SA: ), the most heavily weighted stock in the index, fell
0.37 percent to 29.70 reais.

Mining company Vale (VALE5.SA: ), the world’s largest
producer of iron ore, was up 0.07 percent to 43.20 reais.

Steelmaker CSN (CSNA3.SA: ) fell 0.87 percent to 28.60 reais.
The company said Friday its board approved a buyback program
for up to 28.9 million shares. [ID:nN07178396]

Rival steelmaker Usiminas (USIM5.SA: ) lost nearly 1 percent
to 51 reais, and Gerdau (GGBR4.SA: ) sank 2.42 percent to 26.20
reais.

Yields on Brazilian interest rate futures contracts
(0#DIJ:: ) were little changed, especially among shortest-termed
contracts.

The yield on the contract due June 2010 (DIJM0: ) traded at
9.385 percent from 9.375 percent. The yield on the contract due
January 2011 (DIJF1: ) ticked to 10.99 percent from 11.03
percent. Both were among the most active contracts.

The government said Friday the benchmark IPCA consumer
price index rose 0.57 percent in April from 0.52 percent in
March. The median forecast in a Reuters poll was for an
increase of 0.54 percent. [ID:nN07262832]

Twelve-month inflation through April quickened to 5.26
percent.

Brazil’s 2010 inflation target is 4.5 percent, plus or
minus 2 percentage points. The central bank uses the target as
a guide in setting its key borrowing rate, the Selic, which it
raised last week to 9.5 percent from 8.75 percent.

Investing Research

(Reporting by Luciana Lopez; editing by Jeffrey Benkoe)

Brazil stocks tumble on investor jitters