European Stocks Fall for Third Day; Danone, Fresnillo Retreat

By Sarah Jones

Nov. 19 (Bloomberg) -- European stocks retreated for a third day as Groupe Danone SA cut its sales forecast and mining companies dropped with metal prices. U.S. index futures and Asian shares declined.

Danone sank 5.1 percent after the world’s largest yogurt maker cut its target for medium-term annual sales growth, citing “profound” changes in consumer spending. Fresnillo Plc and Xstrata Plc led basic-resource producers lower. Infineon Technologies AG rose 1.3 percent after Europe’s second-biggest maker of semiconductors returned to profit.

The Dow Jones Stoxx 600 Index lost 0.1 percent to 249.29 at 8:26 a.m. in London. The gauge has advanced 58 percent since March 9, pushing its valuation to more than 53 times its companies reported earnings, near the most expensive level since 2003.

U.S. stocks declined yesterday, dragging the Standard & Poor’s 500 Index from a 13-month high. Technology companies led the retreat after profit forecasts at Autodesk Inc. and Salesforce.com Inc. trailed some analyst estimates. S&P 500 futures lost 0.5 percent today.

The MSCI Asia Pacific Index fell for a third day, dropping 0.9 percent, as share-sale plans at Japanese companies including Mitsubishi UFJ Financial Group Inc. raised concern the value of existing holdings will be reduced.

Danone Drops

Danone slid 5.1 percent to 40.36 euros. The company late yesterday said annual sales excluding acquisitions and currency fluctuations will expand at least 5 percent in the medium term, which is about three years, reducing its previous forecast of 8 percent to 10 percent growth.

The yogurt maker confirmed its target for sales growth of about 4 percent in the second half of this year and said annual free cash flow from operations will reach 2 billion euros ($3 billion) by 2012.

Fresnillo, the world’s largest primary silver producer, sank 3.6 percent to 886.5 pence and Xstrata, the fourth-biggest copper supplier, dropped 1.9 percent to 1,106 pence. A measure of basic-resources shares fell the most among the 19 industry groups in the Stoxx 600 as copper, nickel, gold and silver retreated.

Infineon advanced 1.3 percent to 3.51 euros. The semiconductor maker returned to profit after 10 consecutive quarters of losses as demand improved for its automotive and industrial customers.

SABMiller Plc rose 2.1 percent to 1,691 pence. The world’s second-largest brewer said first-half earnings before interest, taxes and amortization slipped 1.7 percent to $2.19 billion, beating the $2.13 billion median estimate of 10 analysts surveyed by Bloomberg.

Voestalpine AG gained 2.5 percent to 25.92 euros. Austria’s biggest steelmaker posted a 97 percent drop in second-quarter net income to 8.4 million euros as demand for steel declined. Analysts had predicted a loss of 33.5 million euros, according to the average estimate of 8 analysts surveyed by Bloomberg.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.