European Stocks Fall, Led by Ahold, Daimler; U.S. Futures Drop

By Adam Haigh

Aug. 28 (Bloomberg) -- European stocks declined, led by retailers and carmakers, after Royal Ahold NV reported earnings that missed analysts' estimates, Toyota Motor Corp. cut its sales forecast and oil rose for a fourth day. U.S. index futures fell, while Asian shares advanced.

Ahold, the Dutch owner of Stop & Shop supermarkets in the U.S., dropped 4.4 percent. Daimler AG, the world's second- biggest luxury carmaker, slipped 2 percent and Renault SA lost 2.3 percent after Toyota cut its sales estimate for Europe as higher gasoline price damped demand. Natixis SA, the French bank seeking 3.7 billion euros ($5.5 billion) in new capital, sank 5.1 percent after reporting a wider-than-forecast loss.

Europe's Dow Jones Stoxx 600 Index declined 0.7 percent to 281.37 at 9:29 a.m. in London. The index has lost 23 percent this year as rising oil prices and more than $500 billion in credit- related losses by the world's largest banks threatened global economic growth, prompting analysts to cut profit estimates.

``It's still too early to be too confident on the earnings picture,'' said Peter Jarvis, a London-based director of European equities at F&C Asset Management, which has about $200 billion. ``We want to see a more benign inflationary backdrop and commodity prices not to rise any more. The most important drivers are still going to be the macro headwinds.''

Futures on the Standard & Poor's 500 Index fell 0.5 percent. Gains by commodity producers helped lift the MSCI Asia Pacific Index 0.2 percent.

Profit among companies in the Stoxx 600 will decline 2 percent on average in 2008, according to data compiled by Bloomberg. That's down from 11 percent growth forecast at the start of 2008, the data show.

House Prices Tumble

The prospect of a recession and tighter mortgage lending discouraged home buyers in the U.K., sending house prices to the biggest annual decline in almost two decades in August, according to Nationwide Building Society, Britain's fourth- biggest mortgage lender.

National benchmark indexes fell in all 17 western European markets that were open except Luxembourg. Germany's DAX sank 0.8 percent. France's CAC 40 slipped 0.4 percent as did the U.K.'s FTSE 100.

Ahold slid 4.2 percent to 8.32 euros after reporting second-quarter net income of 336 million euros, less than the 260 million-euro estimate of eight analysts in a Bloomberg survey.

Daimler, the world's second-largest luxury carmaker, lost 2 percent to 39.32 in Germany. Renault, France's second-largest automaker, slipped 2.3 percent to 55.78 euros.

General Motors Corp., the world's largest truckmaker, fell 6 cents to $10.14 in Germany.

Cutting Forecast

Toyota, the world's second-largest automaker, cut its 2009 sales forecast 6.7 percent as gasoline prices near $4 a gallon damp demand for trucks in the U.S., its biggest market.

Crude rose in New York on speculation Tropical Storm Gustav will be the most damaging since Hurricane Katrina as it moves toward production platforms in the Gulf of Mexico. Oil for October delivery was at $118.78 a barrel, up 63 cents.

Natixis slid 5.1 percent to 5.40 euros as the bank reported a net loss of 1.02 billion euros in the second quarter, wider the 669 million-euro median loss estimate of nine analysts surveyed by Bloomberg.

Swiss Life Holding tumbled 9.4 percent to 203 francs. Switzerland's biggest life insurer reported first-half profit that climbed to 1.64 billion Swiss francs ($1.5 billion), missing the 1.84 billion-franc median estimate of six analysts surveyed by Bloomberg News.

Fannie Mae

Fannie Mae Chief Executive Officer Daniel Mudd replaced three top deputies in an effort to restore investor confidence after record losses and a 90 percent drop in the shares. The shares fell 12 cents to $6.36 in German trading.

Essilor International SA climbed 4.4 percent to 34.67 euros. The world's largest maker of eyeglass lenses reported net income rose 9 percent to 198.3 million euros ($293 million) as it sold more of its products in emerging markets such as Brazil and Argentina. That beat the 192.2 million-euro median estimate of 14 analysts in a Bloomberg News survey. Essilor had reported profit of 181.7 million euros in the year-earlier period.

BT Group Plc climbed 2.5 percent to 169.4 pence. Goldman Sachs Group Inc. raised its recommendation on the stock to ``buy'' from ``neutral,'' saying risks to the share price are now discounted into the price.

Credit Agricole SA added 4.3 percent to 13.78 euros after France's third-biggest bank by market value said its Tier 1 capital ratio, a key measure of financial strength, held steady.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net