Investor confidence deteriorates in July: survey (by Sara Sjolin)

LONDON (MarketWatch) -- Investor confidence continued to deteriorate in July, led by a sharp drop in expectations for corporate profit growth, the BofA Merrill Lynch Survey of Fund Managers showed on Tuesday. The bank's Growth Expectations Composite slumped to 37 in July, down from 43 in June and 54 in May, as 38% of investors feared corporate earnings will worsen in the next 12 months. In addition, concerns that the euro-zone crisis will spread to the region's core countries further increased in July, as survey respondents who see the risk of a negative shock to Germany's economy more than tripled to 32% from 10% in June. "Rising equity prices have failed to lift investor gloom and we still see a quarter of investors expecting a global recession while hopes for further policy easing have been delayed," said Michael Hartnett, chief global equity strategist at BofA Merrill Lynch Global Research.