By Adam Haigh
Dec. 11 (Bloomberg) -- European stocks fell for the first time in four days as concern the economic slowdown from China to America is deepening overshadowed a rally in oil producers on higher crude prices.
GlaxoSmithKline Plc, the world’s second-biggest drugmaker, and Daimler AG led declines among companies that make more than a fifth of their sales in the U.S. as the dollar weakened against the pound and the euro. BHP Billiton Ltd. and Anglo American Plc slipped more than 1.5 percent after Goldman Sachs Group Inc. cut its growth forecast for China. Royal Dutch Shell Plc, Europe’s largest oil company, climbed 2.5 percent.
Europe’s Dow Jones Stoxx 600 Index retreated 0.9 percent to 203.61 at 12:45 p.m. in London. The measure has slumped 44 percent this year as policy makers and governments worldwide introduced measures to cushion economies from the worst financial crisis since the Great Depression.
“The depths of this recession aren’t in the price yet,” said Philip Manduca, London-based head of investments at ECU Group Plc, where he manages more than $1 billion. “Data are worsening at an accelerating degree and that is concerning. That means everything is getting significantly worse,” he told Bloomberg Television.
The Swiss central bank cut its interest rate to a four-year low of 0.5 percent and said further measures are possible as the economy faces a recession that may be the worst since 1982.
Germany’s economy will shrink 2.2 percent next year and the contraction will continue into 2010, with gross domestic product declining 0.2 percent, Germany’s Ifo institute said today.
U.S. Futures
Futures on the Standard & Poor’s 500 Index swung between gains and losses before a report on jobless claims, following a 1.2 percent advance in the benchmark measure for American equities yesterday.
Figures from the Labor Department may show today 525,000 people filed initial claims for unemployment insurance last week compared with 509,000 the prior week, according to a Bloomberg survey of economists. U.S. employers have cut 1.9 million workers from payrolls so far this year, the government said last week.
Stocks in Asia rose for the fifth day, the longest winning streak in seven months, as South Korea cut interest rates to a record low. The MSCI Asia Pacific Index added 1.2 percent as KB Financial Group Inc. surged 7.8 percent in Seoul.
More than $31 trillion has been erased from the value of global equities and credit losses and writedowns at banks and insurers are approaching $1 trillion.
Ruble Devaluation
In Russia, the devaluation of the ruble gathered pace as the central bank loosened control of the currency for the fifth time in a month after reserves fell $161 billion defending the exchange rate. Investors have taken almost $200 billion out of the country, BNP Paribas SA data shows.
GlaxoSmithKline, which made more than 40 percent of sales in the U.S. last year, retreated 2 percent to 1,175 pence. Daimler, the world’s second-largest maker of luxury cars which generates about 20 percent of revenue in the U.S., dropped 3.6 percent to 24.965 euros.
The dollar fell to a six-week low versus the euro and weakened against the pound as Senate Republicans voiced opposition to the $14 billion rescue for General Motors Corp. and Chrysler LLC.
Democratic leaders and the Bush administration are trying to beat a deadline to save the millions of jobs dependent on the car industry before GM and Chrysler burn through their remaining cash. For GM, that could be in three weeks.
Fiat SpA, Italy’s biggest carmaker, slid 3 percent to 5.595 euros as the stock was downgraded to “underweight” from “overweight” at Morgan Stanley.
Mining Companies
BHP, the world’s largest mining company, slid 1.9 percent to 1,211 pence. Anglo American, the fourth-biggest diversified mining producer, sank 2.7 percent to 1,494 pence.
Goldman lowered its forecast for the Chinese economy by 1.5 percentage points to 6 percent in 2009, citing weakness in exports and investment.
“In China, the slowdown will be greater than during the Asia financial crisis or the 2001 dot-com bust,” the brokerage wrote in an e-mailed report today. “The near-term growth outlook in China is particularly weak.”
Shell added 2.5 percent to 1,798 pence and BP Plc climbed 3.5 percent to 530.25 pence. Crude oil rose for a second day after Saudi Arabia said it is producing near its OPEC target, a sign the world’s biggest exporter is complying with supply cuts agreed by the group in October.
Ericsson, the world’s biggest maker of wireless networks, slipped 3.5 percent to 62.9 kronor after Merrill Lynch & Co. lowered its recommendation to “underperform” from “buy.” The shares have risen 25 percent in the past six weeks and are approaching Merrill’s price target of 67 kronor, Andrew Griffin, a London-based analyst, wrote in a report today.
UPM-Kymmene Oyj retreated 9.8 percent to 9.41 euros. Europe’s second-biggest papermaker said it will miss its fourth- quarter earnings targets because of a higher-than-anticipated drop in deliveries.
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.
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