EMERGING MARKETS-Latam stocks drop on Petrobras, weak US data

* Petrobras hit by worries about share offering

* Weak Philly Fed factory poll, U.S. jobless claims weigh

* Bovespa down 1 pct, Mexico’s IPC down 1.1 pct

MEXICO CITY/SAO PAULO, Aug 19 (BestGrowthStock) – Latin American
stocks fell on Thursday as an unexpected drop in regional U.S.
manufacturing and a big jump in jobless claims fed concerns
about a slowdown in the U.S. economy.

Shares in Brazilian oil firm Petrobras fell on fears the
government could determine a higher-than-expected value for oil
reserves to be used in a oil-for-shares capital plan.

The MSCI Latin American stock index (.MILA00000PUS: ) shed
1.7 percent, erasing this week’s gains. The Thomson Reuters
Latin America total return index (.TRXFLDLATU: ) fell 1 percent.

U.S. factory activity in the U.S. Mid-Atlantic region
contracted in August to its lowest level in more than a year,
while new claims for unemployment benefits jumped to a
nine-month high, data showed. For details, see [ID:nN19350083]

“The U.S. data badly contaminated the market,” said Juan
Jose Resendiz, head of analysis at brokerage Arka in Mexico
City.

Latin America stocks have been pressured by concerns about
slowing growth in the United States, which is Mexico’s top
trading partner and a major influence on the region.

Brazil’s Bovespa stock index <.BVSP declined 1 percent as shares in Petrobras (PETR4.SA: ) lost 2.5 percent.

PETROBRAS UNCERTAINTY

A consulting firm hired by the government has valued oil
reserves to be used in Petrobras’ capital plan at $10-$12 per
barrel, well above estimates of $5-$6 per barrel, local media
reported. [ID:nN19191978]

The valuation will be used to determine how many shares
Petrobras will need to pay the government to develop offshore
fields.

“Chances are now that the final price will benefit the
Federal Government only and be detrimental to Petrobras,” wrote
Banif Securities in a note to clients, adding that a
disagreement could lead the government to postpone the deal
until next year.

Brazilian miner Vale (VALE5.SA: ), the world’s biggest
producer of iron ore, gave up early gains that had lifted it to
a 14-week to fall 0.7 percent.

Mexico’s IPC stock index (.MXX: ) fell 1.1 percent to
32,047.65. The IPC has shed more than 2 percent since Aug. 2
amid fears that U.S. could eventually tip back into recession
after climbing out of a slump last year.

Analysts said further stock price declines could lead major
stock indexes in the U.S. and Latin America to break through
key technical levels, spurring further losses.

“We have strong support in 32,000. If we break that, it is
‘good bye,'” Resendiz said.

Wal-Mart de Mexico (WALMEXV.MX: ), the country’s top
retailer, shed nearly 1 percent and America Movil (AMXL.MX: ),
billionaire Carlos Slim’s flagship telecommunications firm,
lost 0.6 percent.

Top U.S. cement provider Cemex (CMXCPO.MX: ) fell 2.2 percent
to trade barely above a one-year low hit on Monday.

Chile’s IPSA index (.IPSA: ) lost 0.7 percent as top airline
LAN (LAN.SN: ) fell 2 percent as regulators looked into a
proposed merger with Brazil’s TAM (TAM.N: )(TAMM4.SA: ).

“Until that deal closes, there’s going to be a lot of
volatility,” said Felipe Mercado, an analyst at Banchile in
Santiago.
(Reporting by Michael O’Boyle in Mexico City, Elzio Barreto
in Sao Paulo and Brade Haynes in Santiago; editing by Jeffrey
Benkoe)

EMERGING MARKETS-Latam stocks drop on Petrobras, weak US data