Europe Stocks Fluctuate as Air France Drops; U.S. Futures Fall

By Adria Cimino

March 27 (Bloomberg) -- European stocks fluctuated between gains and losses as the Dow Jones Stoxx 600 Index headed for its third straight weekly advance. U.S. index futures slipped.

Air France-KLM Group dropped for a third consecutive day as Europe’s biggest airline said the global recession and collapse in air travel will push it to a loss for the year. Siemens AG, the region’s largest engineering company, rose 3.7 percent after sticking to its profit forecast for this year.

Europe’s Stoxx 600 slipped less than 0.1 percent at 8:25 a.m. in London after increasing 0.1 percent, leaving it with a weekly advance of 3.8 percent. The MSCI Asia Pacific Index rose 0.1 percent, extending its climb since March 20 to 7.6 percent.

Futures on the Standard & Poor’s 500 Index fell 0.3 percent. The benchmark for U.S. equities rallied yesterday, extending the market’s best monthly gain since 1974.

The MSCI World Index of 23 developed countries has gained 12 percent in March, the biggest advance since 1975, as banks from Citigroup Inc. to Bank of America Corp. and JPMorgan Chase & Co. said they made money in the first two months of 2009 and U.S. Treasury Secretary Timothy Geithner unveiled plans to rid financial firms of toxic assets.

Obama, Pandit, Dimon

President Barack Obama will seek support today from executives of the nation’s largest banks for his plan to stabilize the financial system. The meeting at noon Washington time is scheduled to include chief executive officers Vikram Pandit of Citigroup, JPMorgan’s Jamie Dimon and Lloyd Blankfein of Goldman Sachs Group Inc.

Reports on U.S. consumer spending and sentiment may provide evidence about the pace of economic recovery. U.S. consumer spending probably rose in February for a second month, economists said.

Today’s data “could unnerve investors once again should any big shortfalls be seen,” Matthew Buckland, a dealer at CMC Markets in London, wrote.

Air France slumped 5.5 percent to 6.74 euros. The airline said it will post a loss for the year ending March 31 and that it’s unlikely to report a profit in the following 12 months. The airline will suffer an operating loss of about 200 million euros ($271 million) this fiscal year.

Siemens added 3.7 percent to 46 euros. The company stuck to its profit forecast for this year and said earnings at its main divisions will rise at least 10 percent in the three months through March.

BMW Advances

Bayerische Motoren Werke AG climbed 2.4 percent to 23 euros. The world’s biggest maker of luxury cars was raised to “buy” from “hold” at Societe Generale SA, which said “fundamentals remain very solid despite a very tough environment.”

Balfour Beatty Plc gained 3 percent to 345 pence. Britain’s biggest builder was raised to “equal weight” from “underweight” at Morgan Stanley.

Monte dei Paschi di Siena SpA surged for a 10th straight day, rising 6.8 percent to 1.17 euros. Italy’s third-biggest bank said it will apply for 1.9 billion euros in government aid after posting a 47 percent decline in fourth-quarter profit.

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