European, U.S. Stock-Index Futures Fall; BMW, Valeo May Decline

By Sarah Jones

Oct. 2 (Bloomberg) -- European stock-index futures declined on concern the $700 billion U.S. plan to rescue banks won't prevent an economic slowdown. Asian shares and U.S. index futures also retreated.

Bayerische Motoren Werke AG, the world's largest maker of luxury cars, may decline after sales in the U.S. fell 26 percent last month. Valeo SA, France's second-largest auto-parts maker, may drop after cutting its profit target. Heidelberger Druckmaschinen AG will probably retreat as the world's biggest printing-press maker reported an operating loss.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, lost 5, or 0.2 percent, to 3,070 at 7:42 a.m. in London. The U.K.'s FTSE 100 Index may increase 26, according to CMC Mrakets, a betting firm.

``It looks like we are not going to have the most optimistic of openings,'' said Tom Hougaard, London-based chief market strategist at City Index Group. ``Volatility is here to stay. Carmakers really dragged down the European shares yesterday and we expect that to continue today.''

UBS AG, the European bank with the most losses from the global credit crisis, may gain after saying it had a ``small profit'' in the third quarter.

Investors will also be watching comments from the European Central Bank, which decides today on rates. Policy makers are expected to leave their benchmark interest rate at a seven-year high of 4.25 percent today. An announcement is due at 1:45 p.m. and ECB President Jean-Claude Trichet will hold a press conference 45 minutes later.

U.S., Asia

U.S. stocks yesterday retreated as a report showed manufacturing contracted more than forecast and analysts cut earnings estimates on industrial companies. Commodity producers and carmakers led Asian shares lower today.

U.S. index futures reversed earlier gains after the Senate approved the bank rescue plan. The package, which was rejected earlier by the lower house of Congress, authorizes the purchase of troubled assets from financial companies. It passed the Senate with a 74-25 vote.

The Stoxx 600 fell 11 percent in September, the worst monthly slump since January, as bailouts of financial companies worldwide accelerated and bank credit losses and writedowns approached $600 billion.

U.S.-traded securities of BMW ended 0.5 percent below the close in Germany yesterday. Deliveries declined to 18,506 cars and sport-utility vehicles in September from 24,932 a year earlier, the company said.

Mini sales declined 6.7 percent to 3,762 cars last month, while BMW brand decreased about 30 percent to 14,744.

Cutting Target

Valeo cut its 2008 operating profit target, saying earnings will about match the figure for 2007. The company had earlier forecast improvement this year.

The Paris-based company is also ``evaluating the consequences'' of a new environment, marked by ``brutal deterioration'' of production, to re-evaluate medium-term targets, Valeo said in an online statement today.

Heidelberger Druck reported a second-quarter operating loss of as much as 20 million euros ($28 million) before restructuring costs as a slowing world economy deterred some customers.

Revenue fell about 10 percent from a year earlier to as low as 800 million euros.

UBS may rise after the lender had its first profit in more than a year in the third quarter after reducing holdings of mortgage-related securities.

``UBS currently expects to report a small profit,'' the Zurich-based bank said. The company, which ``substantially reduced its U.S. commercial and residential mortgage-related positions,'' forecast 2009 will be a profitable year.

Marks & Spencer Group Plc may move after the retailer said sales at stores open at least a year fell 6.1 percent in the fiscal second quarter ended Sept. 27, as slumping consumer confidence prompted Britons to spend less on fashions and food.

The decline still beat the median estimate of six analysts surveyed by Bloomberg News for a 6.9 percent decline.

To contact the reporter on this story: Sarah Jones in Copenhagen at sjones35@bloomberg.net.