Mexican stocks snapped

Mexican stocks snapped a 10-session winning streak and closed lower Friday as investors took advantage of earnings concerns and U.S. stock losses to book profits. The market's IPC index of leading issues closed down 0.9%, or 291.43 points, at 30,726.30. Volume was a moderate 212.8 million shares worth 6.3 billion pesos ($481 million). In the U.S., several disappointing earnings reports and a weaker-than-expected consumer confidence reading overshadowed above-estimate industrial production data for September, and stocks moved lower. The Dow Jones Industrials closed down 0.7%, just shy of the 10,000 mark reached this week for the first time in a year. Carlos Hermosillo, an equities analyst at the Vector brokerage, said that showing provided an excuse for selling after 10 consecutive sessions of gains in the local market that pushed the IPC up 8.5%. The extended rally ahead of the bulk of Mexico's third-quarter reports suggests earnings won't be bad, and the market will probably take a break to see if expectations are confirmed, he said. IPC heavyweight America Movil (AMX, AMX.MX) L shares fell 0.7% to MXN31.53, and cement company Cemex (CX, CEMEX.MX) CPO shares fell 3.2% to MXN17.44. Construction company Cicsa (CICSA.MX) B-1 shares gave up early gains and fell 1.7% to MXN8.09. Cicsa said it will carry out MXN3.68 billion in construction work on a toll road concession won Thursday by infrastructure company Ideal (IDEAL.MX). Both firms are controlled by billion Carlos Slim. The peso recovered from early losses against the U.S. dollar, but still closed weaker at MXN13.1050 compared with MXN13.0775 Thursday. Earlier Friday, the currency weakened as far as MXN13.18. RBS Securities said in a report that congressional approval of the government's 2010 budget proposal, which calls for higher taxes to offset lower oil revenue, could push the peso/dollar rate towards MXN12.60 in the near term. "Failure to approve the tax measures would likely trigger ratings downgrades," RBS said. Political parties in the lower house of Congress are expected to work over the weekend on the income side of the budget with the aim of passing it early next week. The final shape of the budget depends to a large extent on the opposition Institutional Revolutionary Party, or PRI, which is expected to support some if not all of the government's tax proposals. In its monthly monetary policy meeting, the Bank of Mexico on Friday left the overnight rate at 4.5%, saying it expects inflation to continue easing as the economy pulls out of recession. The central bank said gross domestic product probably expanded nearly 3% in the third quarter from the second quarter. That would mark an end to a string of four consecutive quarters of sequential contraction as Mexico suffered its deepest recession in decades.