Brazilian stocks extend declines

Carla Mozee, MarketWatch Sept. 24, 2009, 7:41 p.m.

LOS ANGELES (MarketWatch) - Brazilian shares continued their backtracking from multi-month highs on Thursday, with investors driving down equities regionally and on Wall Street after an unexpected drop in U.S. housing sales increased worries about an industry that's key to an economic recovery.

"A disappointing move," wrote economist Jennifer Lee at BMO Capital Markets in a note to clients Thursday, "but it doesn't take away from the fact that the housing market is improving. Given the six-month streak of increases in pending home sales, look for some retracement in the September data."

Many analysts have said that the U.S. economic prospects for recovery will be limited by continuing turmoil in the housing sector. Improved economic conditions in the U.S. are important for exporting countries.

Brazil backtracks
Brazil's Bovespa fell 0.7% to 60,046.28, its second straight session of losses. The benchmark tracking Latin America's largest equity market earlier this week closed above 61,000 points for the first time since mid-July 2008.

Shares of oil giant Petrobras /quotes/comstock/13*!pbr/quotes/nls/pbr (PBR 43.88, -0.06, -0.14%) lost 1.3% as crude-oil prices tumbled 4% to a two-month low at $65.89 a barrel, dogged in part by worries about lower demand.

Stock in mining heavyweight Vale /quotes/comstock/13*!vale/quotes/nls/vale (VALE 22.10, -0.36, -1.60%) fell 1.1%. But Gol shares /quotes/comstock/13*!gol/quotes/nls/gol (GOL 9.88, -0.09, -0.90%) reversed losses to finish up 0.5%. They fell 3.8% in the previous session after the air carrier said it's selling at least 51.8 million shares in a global offering expected to begin trading Oct. 13.

On the economic front, Brazil's census bureau said unemployment in August rose to 8.1%, slightly higher than July's reading of 8%. The August figure met broadly held expectations.

Carla Mozee is a reporter for MarketWatch, based in Los Angeles.