Global Stocks, U.S. Futures Decline; Toyota, Cisco, Adidas Fall

By Adria Cimino

Nov. 6 (Bloomberg) -- Stocks fell in Europe and Asia and U.S. index futures dropped as disappointing results from Toyota Motor Corp., Cisco Systems Inc. and Adidas AG deepened concern the economic slump will stifle profit growth.

Toyota, the world's second-largest automaker, fell 3.8 percent in Germany after forecasting the biggest drop in profit in at least 18 years. Cisco sank 5.3 percent on its prediction of the first revenue decline in five years. Adidas fell 3.6 percent as the sporting-goods maker reported profit that missed analysts' estimates.

The MSCI World Index lost 2.2 percent to 961.37 at 8:10 a.m. in London. Standard & Poor's 500 Index futures slipped 1.4 percent, while the MSCI Asia Pacific Index slid 6.1 percent. Europe's Dow Jones Stoxx 600 Index declined 2.9 percent. The European Central Bank and the Bank of England will probably cut interest rates today as growth in the region slows.

U.S. stocks yesterday had their biggest plunge following a presidential election as reports on jobs and service industries stoked concern the economy will worsen even as President-elect Barack Obama tries to stimulate growth.

``During the 24-48 hours of election euphoria, the underlying economic problems have not gone away,'' Ben Potter, a research analyst at IG Markets in Melbourne, wrote in a note to clients. ``The market realizes this and now seems to be waiting for the next development, perhaps an Obama-inspired economic recovery plan.''

Earnings Tally

Earnings for the 956 companies in western Europe that reported results since Oct. 7 declined 6.7 percent on average, trailing expectations by 5.4 percent, Bloomberg data show.

Toyota dropped 3.8 percent to 3,664.49 yen in Germany. The company forecast lower profit as a global slump cripples auto demand. Cisco, the top maker of networking equipment, fell 5.3 percent to $16.47 after predicting the first revenue decline in five years because of the financial crisis.

Europe's Stoxx 600 has rebounded 14 percent from a five- year low on Oct. 27 after central banks from the U.S. and Japan to Frankfurt and London cut borrowing costs to revive economic growth and money-market interest rates declined. Still, the regional gauge is down 39 percent in 2008, headed for its worst year on record.

ECB policy makers will cut rates for the second time in less than a month today as the region's economy suffers its worst slowdown in 15 years, economists said. ECB policy makers meeting in Frankfurt will lower the benchmark lending rate to 3.25 percent from 3.75 percent, according to 54 of 55 economists in a Bloomberg News survey.

Rate Decisions

The ECB announces its decision at 1:45 p.m. Frankfurt time and Trichet holds a press conference 45 minutes later. Separately, the Bank of England will lower its key rate by half a point at noon in London, another survey of economists showed.

Adidas, the world's second-largest sporting-goods maker, fell 3 percent to 29.47 euros after reporting third-quarter net profit of 302 million euros ($388 million). That missed the 320.5 million-euro average of five analysts' estimates compiled by Bloomberg.

Hermes International SCA, the French maker of Birkin handbags, sank 5.4 percent to 95.96 euros. Revenue rose to 410.5 million euros from 395 million euros a year earlier, just below the 410.8 million-euro median estimate of analysts surveyed by Bloomberg. Growth was about a third of the prior quarter's 12 percent increase.

Axa, KBC

Axa SA dropped 5.7 percent to 15.725 euros. Europe's largest insurer had a 3.4 percent decline to 20.14 billion euros in third-quarter revenue on lower sales of life and savings products in the U.S. and U.K. That compares with the 20.2 billion-euro median estimate of eight analysts surveyed by Bloomberg.

KBC Group NV slipped 3.9 percent to 33.40 euros. Belgium's biggest bank and insurer by market value reported a third- quarter net loss of 906 million euros, the first loss since its creation in a 1998 merger, on writedowns of collateralized debt obligations. The median estimate of seven analysts in a Bloomberg News survey was for a loss of 910 million euros.

Total SA, Europe's biggest oil refiner, dropped 3.7 percent to 41.19 euros. Royal Dutch Shell Plc, the region's biggest energy company, sank 3.9 percent to 21.06 euros.

Oil fell, extending yesterday's more than 7 percent loss, on signs of slowing fuel demand after a U.S. Energy Department report showed an unexpected increase in gasoline inventories. Crude for December delivery declined as much as 1.6 percent to $64.28 a barrel in New York.

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