Latam stock rebound fizzles

A week that started with a bang, knocking Latin American stocks to a one-year low, ended with a whimper as a rebound lost steam due to persistent fears of a US recession and a deepening EU debt crisis. The MSCI Latin America stock index closed up 0.69 percent on Friday, but the index is down more than 11 percent during the last two weeks, its worst two-week run since May 2010.
Data on Friday showed a rise in July US retail sales, but another report showed consumer confidence in the United States plunged to its lowest level since 1980 in early August. Gains in Brazil's market faded, also hurt by weak earnings from homebuilders. Mexico reversed early gains to slump.
--- Moving average of outflows hits highest since May 2010
The sharp drop in Latin American stocks during the last two weeks pushed foreign investors to stop-loss levels and fund managers are unlikely to plow back into emerging market assets anytime soon, Barclays Capital wrote in a report. US-based mutual funds investing in Latin America have pulled about $650 million out of the region's stocks in the last two weeks ended August 10, according to data from Lipper, a Thomson Reuters company.
The 4-week moving average of outflows has hit its highest since May 2010, when Europe's debt crisis first exploded. Brazil's Bovespa stock index rose 0.24 percent, bringing its weekly gain to about 1 percent after a 10 percent slump in the week before. Shares in energy company OGX rose 3.05 percent on Friday.
Weak earnings reports from homebuilders fanned worries over the state of Latin America's largest economy. The Bovespa has also been hurt by fears inflation is slipping out of control of the central bank and will eat into economic expansion. Shares of PDG Realty, the country's biggest homebuilder lost 3.06 percent. The company is expected to report flat earnings on Sunday. It rival real estate developers Gafisa lost 5.99 percent and Rossi Residencial gave up 6.08 percent.
Mexico's IPC index lost 0.68 percent, leaving the index down about 1 percent on the week even though it managed to rebound from a one-year low. Big sell orders overwhelmed low volume on Friday, traders said. Mexico's market, often closely tied to Wall Street, fell even as US stocks held gains.
Shares in Wal-Mart de Mexico lost 2.36 percent. Goldman Sachs cut its rating on Mexico's top retailer this week to "neutral" from "buy," citing uncertainty on sales trends. Chile's IPSA index rose for a fourth straight day, adding 0.89 percent. Chilean airline LAN rose 2.71 percent a day after a Brazilian ministry recommended the approval of its merger with Brazil's TAM.