May 16 (Bloomberg) -- European stocks declined, pushed lower by banks and airlines, after earnings at Credit Agricole SA missed analysts' estimates and analysts cut recommendations on Air France-KLM Group and EasyJet Plc.

The Dow Jones Stoxx 600 Index has retreated from the 6 1/2 year high reached last week as concern heightened about a slowdown in the U.S., Europe's biggest trading partner. Building permits in the U.S. dropped to the lowest in almost a decade, a government report showed today.

``Concern about U.S. demand'' weighed on markets today, said Carsten Klude, who helps manage $20 billion as head of investment strategies at M.M. Warburg & Co. in Hamburg. ``Investors are torn between growth concerns and hopes for an interest rate cut.''

The Stoxx 600 Index fell 0.2 percent to 389.47 at the close in London, as 310 stocks dropped and 260 gained. The Stoxx 50 dropped 0.4 percent, as did the Euro Stoxx 50, a measure for the 13 nations sharing the euro.

Rio Tinto Group limited losses on speculation rising prices for metals will boost earnings at mining companies.

Bayerische Motoren Werke AG, the world's biggest luxury carmaker; HSBC Holdings Plc, the region's largest bank by market value, and Statoil ASA, Norway's No.1 oil company, are among companies that weighed on indexes today as they traded without the right to a dividend.

National benchmarks fell in 10 of 18 markets in western Europe. France's CAC 40 dropped 0.5 percent, Germany's DAX shed 0.4 percent, while the U.K.'s FTSE 100 declined 0.2 percent.

Credit Agricole

Shares of Credit Agricole slid 4.1 percent to 31.61 euros. The French bank said first-quarter net income rose 92 percent to 2.66 billion euros ($3.62 billion) after a gain from reducing its stake in Italy's Intesa Sanpaolo SpA.

That missed the 2.74 billion-euro median estimate of 13 analysts surveyed by Bloomberg News.

Shares of Air France-KLM, Europe's biggest airline, slipped 2.1 percent to 35.59 euros after UBS AG cut its recommendation to ``neutral'' from ``buy.''

``There is no longer enough upside to our price target'' which is 40 euros, Tim Marshall, an analyst at UBS in London, wrote in a report. ``With the results on May 24 we prefer to wait and see how Air France has fared in the fourth quarter.''

EasyJet fell 1.8 percent to 581 pence after Goldman, Sachs & Co. put the carrier's shares on its ``Pan-Europe Sell List,'' cutting its recommendation to ``sell'' from ``neutral.''

``This summer will not be as good for revenue as the share price implies,'' London-based analysts including Hugo Scott-Gall wrote in a report.

Vivendi SA added 1.1 percent to 31.18 euros. The publisher of the world's most popular online video game said yesterday first-quarter profit rose 32 percent to 932 million euros ($1.27 billion), spurred by demand for World of Warcraft and subscriber growth at the pay-television unit.

Profit excluding some costs, which Vivendi calls adjusted net income, rose 23 percent, more than analysts predicted.

New Projects

Rio Tinto, the world's third-largest mining company, added 2.6 percent to 3,570 pence. BHP Billiton and rival mining and energy companies are planning a record A$43.4 billion ($36.2 billion) of new projects in Australia, driven by rising prices and demand, the government's commodity forecaster said.

Vedanta Resources Plc, India's largest producer of copper and zinc, added 1.9 percent to 1,422 pence after reporting second half net income rose 90 percent.

Zurich Financial Services AG, Switzerland's largest insurer, reported first-quarter net income of $1.39 billion on fewer claims from natural disasters, beating the $1.08 billion median estimate of eight analysts surveyed by Bloomberg News. The shares climbed 2 percent to 384.75 Swiss francs.

Bulgari

Bulgari SpA jumped 5.9 percent to 11.62 euros. The world's third-largest jeweler said yesterday first-quarter profit rose 31 percent to 23.9 million euros as the company sold more perfume and expanded in the Far East. That beat the 20.3 million-euro median estimate of four analysts surveyed by Bloomberg News.

Michelin & Cie., the world's second-largest tiremaker, rose 1.5 percent to 92.29 euros on speculation raw material costs might fall. Nokian Renkaat Oyj, the biggest Nordic tiremaker, gained 1.5 percent to 24.34 euros.

The average natural-rubber price on the Tokyo Commodities Exchange, the global benchmark, may drop 4 percent this year as Southeast Asian supplies gain, and some users switch to cheaper alternatives, traders and analysts said.

Shares of Julius Baer Holding AG rose 4.3 percent to 88.95 francs on speculation Deutsche Bank AG may be interested in buying Switzerland's largest publicly traded private bank.

``There is speculation in the market that Deutsche Bank is interested,'' said Christof Ruemmelein, a trader at Merck, Finck & Co in Munich.

UBS

UBS AG, Switzerland's biggest bank, said this month that it may sell a 20.7 percent stake in Julius Baer once an agreement to hold the shares expires at the end of this month.

Julius Baer spokesman Martin Somogyi, Deutsche Bank spokesman Ronald Weichert, and UBS spokesman Serge Steiner declined to comment.

Land Securities Group Plc dropped 4.1 percent to 1,935 pence after Europe's largest real estate investment trust said some of its ``lesser quality'' retail properties, mostly warehouses, suffered ``a fall in values over the last six to nine months.'' Fiscal full-year profit more than doubled, helped by a tax gain.

``These results confirm to us that capital growth is slowing in the U.K. property market and that the risk is on the downside,'' said Harm Meijer, an analyst at JP Morgan Chase & Co. in a note to investors. He reiterated his ``overweight'' recommendation on the stock.

Next Plc plummeted 6.4 percent to 2,247 pence, the steepest loss in the Stoxx 600 today. The U.K.'s third-largest clothing retailer said a same-store sales decline worsened as shoppers defected to Marks & Spencer Group Plc.

To contact the reporter on this story: Andreas Hippin in Frankfurt at ahippin@bloomberg.net.

Last Updated: May 16, 2007 11:57 EDT