Aug. 10 (Bloomberg) -- European stocks dropped the most in four years as concern increased that a widening credit crunch may hurt economic growth and earnings.

Societe Generale SA and Deutsche Bank AG led the Dow Jones Stoxx 600 Index to the lowest since March. ABN Amro Holding NV fell the most in a year on speculation financial-market turmoil may derail the world's biggest banking takeover.

The Stoxx 600 has lost 9.4 percent since closing at a 6 1/2- year high June 1 on concern the rout in U.S. subprime mortgages may spill over into the economy, erode earnings growth and curb takeovers. Central banks in Europe, the U.S. and Japan pumped money into credit markets to help meet demand for cash.

``It's ugly out there and things are likely to get worse before they get better,'' said Tony Dolphin, director of strategy and economics at Henderson Global Investors in London, which oversees about $125 billion. ``Markets are in the dark. I don't see how they can get clarity in the short-term.''

Europe's Stoxx 600 sank 3.1 percent to 362.77, the steepest loss since May 19, 2003. The Stoxx 50 tumbled 3.2 percent, and the Euro Stoxx 50, a measure for the euro region, sank 2.7 percent.

Treasuries rallied and credit-default swaps on European corporate bonds increased as the subprime mortgage debacle rattled markets.

All national benchmarks in western Europe's 18 markets declined. The U.K.'s FTSE 100 dropped 3.7 percent, France's CAC 40 lost 3.1 percent, and Germany's DAX decreased 1.5 percent.

More Cash

The Bank of Japan added 1 trillion yen ($8.5 billion) to the financial system. The U.S. Federal Reserve has added $43 billion in temporary funds over the past two days, and the ECB loaned 61.05 billion euros ($83.6 billion), putting funds into the banking system for a second day.

Societe Generale, France's second-biggest lender, fell 5 percent to 122.2 euros. Deutsche Bank, Germany's biggest bank, fell 3.5 percent to 95.19 euros. UniCredit SpA, Italy's biggest, sank 3.6 percent to 6.036 euros.

``The fact that the Fed, ECB and BOJ all had to inject short-term liquidity is worrying as they may know more than most about how significantly the financial system is being impacted,'' said Simon Carter, who helps oversee $3 billion at Aegon Asset Management in Edinburgh.

ABN Amro lost 3.5 percent to 33.85 euros, the biggest decline since August 2006. The largest Dutch lender is the target of a takeover battle between Barclays and a group consisting of Royal Bank of Scotland Group Plc, Banco Santander SA and Fortis. Barclays this week won European Union approval to buy ABN Amro.

The market turmoil ``does jeopardize the ABN Amro deal,'' said Mike Trippitt, a London-based analyst at Oriel Securities Ltd.

ABN Amro spokesman Jochem van de Laarschot said there were ``no new developments on the offer process.''

BHP, Man

BHP Billiton Ltd., the world's largest mining company, declined 6.7 percent to 1,261 pence in London. Rio Tinto Group, the third biggest, dropped 6.2 percent to 3,008 pence.

Copper, nickel and zinc headed for a third straight week of declines in London. Lead fell to a one-month low.

The Dow Jones Stoxx Basic Resources Index sank 5.5 percent, its steepest drop since June 2006 and the biggest decline among the Stoxx 600's 18 industry groups.

Man Group Plc, the world's largest publicly traded hedge fund company, tumbled 9.1 percent to 479.25 pence. Man Group indefinitely delayed plans to sell shares of Man Dual Absolute Return Fund in the U.S. because of volatile markets, Reuters said today. A spokesman for Man Group declined to comment.

Old Mutual Plc fell 5.9 percent to 151.9 pence. The U.K. insurer that makes most of its profit in South Africa said first- half operating profit fell more than analysts estimated, hurt by the weakness of the South African rand and the U.S. dollar.

Solvay SA sank 5.1 percent to 100.6 euros after the world's largest maker of male hormone therapies said U.S. regulators declined to clear its bifeprunox schizophrenia drug until the company provides more data on its effectiveness.

To contact the reporters on this story: Sarah Thompson in London at sthompson17@bloomberg.net

Last Updated: August 10, 2007 12:11 EDT