European Stocks Fall; U.S. Index Futures Are Little Changed

By Adria Cimino

June 24 (Bloomberg) -- European stocks fell for a fifth day as higher oil prices weighed on earnings prospects for carmakers and airlines, while Kesa Electricals Plc said sales weakened. U.S. index futures were little changed, and Asian financial shares dropped.

Daimler AG, the world's second-largest maker of luxury cars, and Ryanair Holdings Plc, Europe's biggest discount carrier, declined as oil rose for a third day. Kesa dropped after Europe's third-largest consumer-electronics retailer refrained from announcing a stock buyback after sales growth weakened in its second half.

The Dow Jones Stoxx 600 Index lost 0.3 percent to 293.97 at 9:35 a.m. in London. Futures on the Standard & Poor's 500 Index rose less than 0.1 percent, while the MSCI Asia Pacific Index decreased less than 0.1 percent.

The Stoxx 600 has tumbled 19 percent this year on speculation higher inflation will keep policy makers from cutting borrowing costs, while credit-related losses approaching $400 billion erode economic and profit growth.

National benchmark indexes decreased in 12 of the 17 western European markets that were open. France's CAC 40 and Germany's DAX fell 0.3 percent. The U.K.'s FTSE 100 gained 0.2 percent.

Daimler slid 2.7 percent to 42.36 euros. Fiat SpA, Italy's biggest carmaker, retreated 2.2 percent to 11.33 euros.

Ryanair lost 1.9 percent to 2.91 euros.

Crude rose as the U.S. dollar dropped, enhancing the appeal of commodities as an inflation hedge, and OPEC's secretary- general said the group won't increase production.

Oil for August delivery increased as much as $1.16, or 0.9 percent, to $137.90 a barrel in electronic trading on the New York Mercantile Exchange.

Consumer Confidence

Kesa sank 5.3 percent to 165.25 pence. Chief Executive Officer Jean-Noel Labroue said profit and sales growth weakened over the second half and that a drop in consumer confidence is continuing. Kesa, which raised 550 million euros ($856 million) by selling its BUT unit, refrained from announcing the timing or amount of a share buyback.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.