European Stocks Decline, Led by BHP, ABB; U.S. Futures Retreat

By Adria Cimino

July 24 (Bloomberg) -- European stocks fell, dragging the Dow Jones Stoxx 600 Index from the highest this month, as a retreat in commodity prices weighed on mining and energy shares and German business confidence sank to a three-year low. U.S. index futures retreated, while Asian shares advanced.

BHP Billiton Ltd., the world's biggest mining company, and Total SA, Europe's largest oil refiner, declined. ABB Ltd. slumped the most in four months after the world's biggest builder of electricity grids reported earnings that missed analysts' estimates. EasyJet Plc led airlines lower after saying profit will tumble as much as 46 percent.

Europe's Stoxx 600 lost 0.6 percent to 285.03 at 9:43 a.m. in London. Futures on the Standard & Poor's 500 Index slipped 0.3 percent, while the MSCI Asia Pacific Index rose 1.5 percent.

``Some main problems still haven't been resolved,'' said Vafa Ahmadi, a fund manager at CPR Asset Management in Paris, which oversees the equivalent of $39 billion. ``The specter of the credit crunch is still there. The decline in German confidence is a result of the current economic climate. There's a certain watchfulness.''

Business confidence in Germany, Europe's largest economy, slipped more than economists forecast as higher interest rates dimmed the outlook for growth. The Ifo institute said its business climate index declined to 97.5 from 101.2 in June. That's the weakest reading since September 2005. Economists expected a drop to 100.1, according to a Bloomberg News survey.

Writedowns

The Stoxx 600 has dropped as much as 26 percent this year on concern accelerating inflation and more than $460 billion in credit-related losses worldwide will stifle economic and profit growth. Better-than-expected earnings by companies from Volkswagen AG to Nokia Oyj sparked a rebound from a three-year low on July 15 and trimmed declines in the pan-European benchmark index to 21 percent.

Analysts estimate earnings for companies in the Stoxx 600 will drop 2.4 percent in 2008, Bloomberg data show. That's down from 11 percent growth predicted at the start of the year.

National benchmark indexes fell in all 17 western European markets that were open except Luxembourg and Switzerland. The U.K.'s FTSE 100 slipped 0.6 percent, while France's CAC 40 lost 0.5 percent. Germany's DAX decreased 0.4 percent.

BHP sank 1.2 percent t 1,596 pence. Rio Tinto Group, the world's third-biggest mining company, retreated 2.2 percent to 4,990 pence.

Gold traded at its lowest in more than two weeks in Asia after the U.S. dollar rallied to a two-week high against the euro, paring demand for the metal as hedge against inflation.

Total, ABB

Total lost 1.8 percent to 48.45 euros. BP Plc, Europe's second-biggest oil company, slid 1 percent to 516.75.

Oil traded near a seven-week low after reports showed demand in the U.S. and Japan, two of the three largest oil consuming countries, fell as high prices crimp fuel consumption.

ABB fell 4.5 percent to 28.86 francs. The world's largest builder of electricity grids said second-quarter profit rose 34 percent to $975 million as nations from the U.S. to China invested in power networks. Analysts in a Bloomberg survey estimated earnings of $982 million.

EasyJet, Europe's second-biggest discount airline, fell 6 pecent to 347.75 after saying fiscal-year pretax profit will fall as much as 46 percent because of higher fuel expenses. Pretax earnings for the year through Sept. 30 will be 110 million pounds ($220 million) to 120 million pounds.

Ryanair Holdings Plc, Europe's largest discount carrier, slipped 2.1 percent to 3.32 euros. Air France-KLM Group, the region's biggest airline, sank 2.9 percent to 16.41 euros.

Credit Suisse

Credit Suisse Group AG climbed 4.6 percent to 52.2 francs. Second-quarter earnings dropped less than analysts estimated as the investment banking unit returned to profit. Net income fell to 1.22 billion Swiss francs ($1.18 billion), or 1.12 francs a share, from 3.19 billion francs, or 2.82 francs, a year earlier, the Zurich-based company said in a statement today. That beat the 617 million-franc median estimate of 14 analysts surveyed by Bloomberg.

Syngenta AG rose 5.1 percent to 296 francs after reporting a 25 percent increase in first-half profit, surpassing analysts' estimates. The company raised its 2009 target as record grain prices spurred farmers to buy more insecticides and seeds.

Amazon.com Inc. reported second-quarter profit more than doubled as customers bought more toys and electronics overseas. Full-year sales may exceed its previous forecast, the company said in a statement. Amazon shares climbed $5.2 to $75.74 in Germany.

Baidu.com Inc. gained $34.74 to $323.44 in Germany after China's most-used search Web site reported an 87 percent increase in second-quarter profit, beating analysts' estimates.

Stora Enso Oyj slipped 7.2 percent to 5.97 euros. Europe's largest paper company said second-quarter profit fell 84 percent, missing estimates, on higher wood costs and weaker demand for lumber.

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