European Stocks, U.S. Futures Decline; Daimler, Ericsson Fall

By Adam Haigh

Dec. 11 (Bloomberg) -- European stocks and U.S. index futures dropped amid concern a $14 billion bailout of American automakers may not get approval in the Senate.

Daimler AG, the world’s second-largest maker of luxury cars, lost 1.8 percent after Senate Republicans voiced opposition to the rescue for General Motors Corp. and Chrysler LLC. Ericsson AB, the biggest maker of wireless networks, slipped 1.7 percent after Merrill Lynch & Co. advised selling the shares.

The Dow Jones Stoxx 600 Index lost 1.13, or 0.6 percent, to 204.24 at 8:10 a.m. in London. Futures on the Standard & Poor’s 500 Index dropped 0.6 percent. The benchmark measure for U.S. equities climbed 1.2 percent yesterday, as higher energy and metal prices lifted commodity producers, overshadowing concern Congress won’t rescue the nation’s auto industry.

The Stoxx 600 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. 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.

Stocks in Asia advanced 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.

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.

Carmakers

Daimler declined 1.8 percent to 25.42 euros. BMW, the world’s biggest maker of luxury cars, dropped 1.5 percent to 22.28 euros.

Porsche SE, maker of the 911 sports car, retreated 1.9 percent to 49.70 euros as Morgan Stanley downgraded the shares to “underweight” from “equal-weight,” citing weaker-than- expected results.

Ericsson fell 1.7 percent to 64.1 kronor after Merrill lowered its recommendation on the company 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.

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