Europe Stocks, U.S. Futures Fall on Economy; GDF Suez, GM Drop

By Sarah Jones

Nov. 26 (Bloomberg) -- European stocks fell for the first time in three days and U.S. index futures declined on concern recessions around the world are deepening.

GDF Suez SA sank 5.7 percent as the world's second-largest utility forecast a ``shortfall'' in the fourth quarter unless natural gas prices are raised. General Motors Corp. and Home Depot Inc. slumped more than 3 percent in Germany.

``Policy makers are recognizing the sense of urgency involved in responding to this crisis,'' said Mike Lenhoff, who helps oversee about $36.4 billion as chief strategist at Brewin Dolphin Securities Ltd. in London. ``The market is trying to establish some kind of platform. We haven't seen good news flow and won't see it for months.''

Europe's Dow Jones Stoxx 600 Index slid 2.5 percent to 193.88 as of 1:35 p.m. in London, after earlier rising as much as 0.7 percent. Futures on the Standard & Poor's 500 Index lost 2.1 percent. The MSCI Asia Pacific Index was little changed.

Stocks in Europe and U.S. index futures extended declines after a report showed orders for U.S. durable goods fell twice as much as forecast in October as the credit freeze deepened and sales tumbled.

Earlier, BCE Inc., Canada's largest phone company, said it might not be able to complete its takeover on schedule, sending stocks lower. BHP Billiton yesterday scrapped its $66 billion bid for Rio Tinto Group, citing turmoil in the financial markets.

The Stoxx 600 has fallen 47 percent in 2008, headed for its worst year on record, as credit losses and writedowns approached $1 trillion in the worst financial crisis since the Great Depression.

`Negative Figures'

National benchmark indexes declined in all 18 markets in western Europe. The FTSE 100 lost 2.7 percent, with Royal Dutch Shell Plc and BP Plc slipping more than 4 percent. France's CAC 40 sank 3.4 percent, led by GDF Suez and Total SA. Germany's DAX slipped 2.9 percent.

European Central Bank President Jean-Claude Trichet said there may be ``negative figures'' for economic growth in the euro area next year.

``Negative figures for growth in 2009 are gradually appearing,'' Trichet said in an interview with an Egyptian newspaper posted on the ECB Web site today. For the euro area, ``we will see exactly what the macroeconomic projections are in the forthcoming days.''

Europe's economy slipped into its first recession in 15 years in the third quarter.

GDF Suez tumbled 5.7 percent to 30.905 euros. The world's second-biggest utility said it expects a ``shortfall'' of 440 million euros ($570.3 million) in the fourth quarter unless French state-set prices for natural gas are raised before the end of the year.

GM, Home Depot

``Current tariffs notably do not take into account spikes in oil prices over the summer,'' the Paris-based company said today in a presentation posted on its Web site. GDF Suez didn't elaborate on what measure of profit the shortfall related to.

General Motors, the carmaker that's seeking U.S. aid to survive, declined 3.9 percent to $3.42 in Germany. Home Depot, the world's biggest home-improvement retailer, lost 3.3 percent to $21.52.

The 6.2 percent drop in bookings of goods meant to last several years was the biggest in two years and followed a revised 0.2 percent decrease in September, the Commerce Department reported. A separate report from Commerce showed consumer spending fell by the most since the 2001 recession.

Tiffany & Co. fell 7.6 percent to $19.25 in pre-market trading after cutting its outlook as sales growth shrank. The world's second-largest luxury-jewelry retailer reduced its forecast full-year earnings of $2.30 to $2.50 a share, lower than the $2.82 to $2.92 it had projected.

Shell, Total

Shell, Europe's largest oil company, sank 4.7 percent to 1,634 pence. BP, the region's second-biggest, dropped 4.9 percent to 495.25 pence. Total, the largest refiner, slumped 3.5 percent to 40.29 euros.

Crude fell $3.73, or 6.8 percent, to $50.77 a barrel yesterday in New York. Oil climbed 65 cents today.

Merrill Lynch & Co. cut its 2009 oil price forecast to $50 a barrel from $90 to reflect the ``very weak'' economic outlook and falling global demand for oil. The bank lowered its 2010 estimate to $70 from $100.

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