European Stocks, U.S. Index Futures Drop; BP, Total, BHP Fall

By Adria Cimino

Dec. 19 (Bloomberg) -- European shares and U.S. stock-index futures declined on concern a deteriorating global economy will hurt the outlook for earnings.

BP Plc, Europe’s second-largest oil company by market value, and Total SA sank at least 2 percent as crude oil headed for its second-biggest weekly drop in more than five years. BHP Billiton Ltd., the world’s largest mining company, slid 2.5 percent as metals prices retreated.

The Dow Jones Stoxx 600 Index decreased 1.3 percent to 194.76 at 8:06 a.m. in London, bringing the weekly loss to 1.7 percent. Futures on the Standard & Poor’s 500 Index fell 0.8 percent, indicating the measure will decline for a third straight day. The MSCI Asia Pacific Index slipped 0.2 percent.

“It’s not far from the worst year in a century for stocks,” said Romain Boscher, a fund manager at Groupama Asset Management in Paris, which oversees about $17 billion in stocks. “Rather than only a stock market crisis, it’s an economic and a financial crisis too -- That’s what’s worrisome,” he told Bloomberg Television.

U.S. stocks yesterday retreated for a second day as a deteriorating credit outlook for General Electric Co. spurred concern the financial crisis is worsening, while oil’s retreat dragged down energy shares.

The Stoxx 600 has slumped 46 percent in 2008 as credit losses and writedowns at the world’s largest banks surpassed $1 trillion and the U.S., Europe and Japan entered the first simultaneous recessions since World War II.

French Economy

France’s economy, the second largest of the 15 countries sharing the euro, will contract by the most since 1974 this quarter and slip into a recession early next year, the national statistics office Insee forecast.

BP lost 2.1 percent to 513.75 pence. Total, Europe’s third- largest oil company, retreated 2.8 percent to 39.14 euros.

Crude oil is set for the second-biggest weekly drop in more than five years and the worst monthly performance since 1986 as a recession prompted consumers to cut fuel use. Oil has fallen 22 percent this week, slumping 9.6 percent yesterday.

BHP declined 2.5 percent to 1,227 pence, while Rio Tinto Group, the world’s third-largest mining company, sank 3.1 percent to 1,481 pence.

Copper futures on the Shanghai Futures Exchange plunged by the daily limit to the lowest in five years after global inventories climbed, signaling waning demand during the recession. Gold declined for a second day.

Carrefour, ABB

Carrefour SA slipped 1.8 percent to 26.66 euros after Moody’s placed its rating for Europe’s biggest retailer under review for a downgrade.

Dassault Aviation SA lost 1.5 percent to 408 euros. The maker of the Falcon corporate jet agreed to buy Alcatel-Lucent SA’s stake in Thales SA for about 1.57 billion euros ($2.24 billion), or 38 euros a share, the two companies said.

ABB Ltd. dropped 4.1 percent to 15.35 Swiss francs. The world’s biggest builder of electricity networks said it will book pretax provisions of $850 million for potential costs related to investigations into alleged anti-competitive practices in the U.S. and Europe.

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