Feb. 12 (Bloomberg) -- European stocks fell for a third day as companies from Electricite de France SA to Diageo Plc posted disappointing results and investors speculated U.S. measures won’t revive the global economy.

EDF, the biggest operator of nuclear reactors, and Diageo, the largest liquor maker, sank more than 3 percent. Fortis dropped 16 percent shareholders rejected the state-organized breakup of what was once Belgium’s largest financial-services company. Volkswagen AG led a slump in automakers after American jobless claims climbed to a record and U.S. Treasury Secretary Timothy Geithner said he needs time to work out details of a bank-rescue plan.

The Dow Jones Stoxx 600 Index slipped 1.3 percent to 190.64. The gauge had rallied 4.3 percent in the first six days of this month on optimism that global stimulus packages, a financial- rescue plan from Barack Obama’s administration and interest-rate cuts would help lift the U.S., Europe and Japan out of recessions.

“There isn’t a miracle solution,” Sebastien Korchia, a fund manager at Meeschaert Asset Management in Paris, which oversees about $2.6 billion, said in a Bloomberg Television interview. “It will take time. The market is worried.”

Stocks maintained losses after government data showed the total number of Americans collecting unemployment benefits reached 4.81 million. Sales at U.S. retailers rose in January for the first time in seven months.

The MSCI Emerging Markets Index of 23 developing nations sank 1.8 percent. India’s Bombay Stock Exchange Sensitive Index slipped 1.6 percent, while China’s Shanghai Composite Index fell 0.6 percent. Russia’s Micex Index decreased 5 percent.

BRICs Outperform

Before today’s drops, China and Russia, along with Brazil, were the only major stock markets recording gains of more than 8 percent this year. India, the fourth member of the so-called BRICs, is down 1.9 percent.

National benchmarks fell in 17 of the 18 western European markets. The U.K.’s FTSE 100 lost 0.8 percent. Germany’s DAX slid 2.7 percent, while France’s CAC 40 retreated 2.1 percent.

U.S. lawmakers yesterday debated a $789 billion plan to revive the economy. U.S. House and Senate lawmakers agreed on a compromise late in the day, a smaller bill than originally approved by both groups. Governments worldwide are attempting to stabilize a global economy battered by more than $1 trillion in writedowns and losses at financial companies with stimulus programs and bank support packages.

Obama’s stimulus plan will be insufficient to avert the biggest U.S. economic decline since 1946 as consumer spending posts its longest slide on record, according to a monthly Bloomberg News survey. The world’s largest economy will contract 2 percent this year, half a percentage point more than last month’s forecast, according to the survey.

‘Very Cautious’

Profits have declined 65 percent for 526 companies in western Europe that have released earnings since Jan. 12, according to Bloomberg data.

“Few companies have visibility on profit or sales,” Jean- Christophe Liard, an analyst at KBL Richelieu Gestion, which oversees $5.2 billion, said in a Bloomberg Television interview from Paris. “Reports are showing either a drop in margins or slowing sales. These reports are a reflection of what’s going on in the economy. We’re very cautious.”

EDF slid 7.5 percent to 32.89 euros after saying 2008 net income fell to 3.4 billion euros ($4.39 billion) because of costs associated with regulated power rates and lower industrial demand amid the economic slowdown.

Diageo, Anglo American

Diageo slipped 3.3 percent to 877.5 pence. The company said full-year operating profit will rise 4 percent to 6 percent, less than a previous forecast for as much as 9 percent growth.

Basic-resource shares in the Stoxx 600 slid 2.5 percent in the Stoxx 600 as copper, lead and nickel prices declined in London. Anglo American Plc, the world’s second-largest mining company, retreated 3.9 percent to 1,324 pence. Xstrata Plc, Europe’s largest zinc producer, sank 3.1 percent to 732 pence.

Fortis dropped 16 percent to 1.11 euros. Shareholders voted yesterday against the sale of the Dutch banking and insurance units to the Netherlands and against selling the majority stake in the Belgian banking business to Belgium.

Those deals have been completed and can only be reversed by mutual consent or by challenging them in court. The rejection of the transaction with the Belgian state derailed BNP Paribas SA’s revised offer for Fortis Bank NV.

Commerzbank Declines

Commerzbank AG lost 4.4 percent to 3.52 euros. The stock was cut to “underweight” from “equal weight” by analysts at Morgan Stanley. A “lack of visibility on financials, including Dresdner and the operating environment” were cited by Morgan Stanley as reasons for the downgrade in a note to investors.

Volkswagen sank 6.9 percent to 251.61 euros. Daimler AG, the world’s second-largest maker of luxury cars, retreated 3.8 percent to 23.79 euros.

Continental AG, Europe’s second-largest car-parts maker,

Rexel SA lost 12 percent to 4.50 euros. The world’s largest distributor of electrical equipment posted a 63 million-euro net loss for the fourth quarter, hurt by falling volume sales and a drop in the price of copper.

Rexel said it expects a “significant” drop in volume sales and prices in 2009, suspended its dividend and said it will cut operating investments by 25 percent.

Nexans SA sank 20 percent to 37.11 euros. The world’s biggest maker of cables and wires said 2008 profit fell to 82 million euros from 189 million euros the year before.

Swiss Reinsurance Co. surged 5 percent to 19.89 francs. The world’s second-biggest reinsurer said Jacques Aigrain resigned as chief executive officer after record losses forced the company to seek capital from investors including Warren Buffett.

Cap Gemini

Cap Gemini SA lost 9.1 percent to 25.73 euros. Europe’s largest computer-services company said 2008 profit rose 2.5 percent to 451 million euros, missing analysts’ estimates, and predicted first-half sales will drop.

Smith & Nephew Plc rose 7.3 percent to 550.5 pence after Europe’s largest maker of shoulder and knee implants said fourth- quarter operating profit increased and that long-term demand was “favorable.”

BT Group Plc lost 7.8 percent to 97 pence, the lowest since at least 1986. The U.K.’s largest phone company reported a 32 percent slide in third-quarter operating profit and saying it may need to book further charges to overhaul the global services division.

Ireland Banks

In Ireland, bank shares slumped after the government announced the 7 billion-euro recapitalization of Bank of Ireland and Allied Irish Banks. Prime Minister Brian Cowen is propping up the two lenders as they face rising losses on loans to property developers.

The government will put 3.5 billion euros into each bank and get warrants giving it an option to buy a 25 percent stake in the lenders, the Finance Ministry in Dublin said late yesterday. The two banks said they “welcomed” the decision.

Bank of Ireland fell 16 percent to 51 cents. The country’s biggest lender by assets today said it will post a loss in the fiscal second half. Allied Irish Banks, Ireland’s largest bank by market value, lost 14 percent to 92.5 cents.

Separately, Moody’s Investors Service downgraded the long- term senior debt and bank deposit ratings of Allied Irish Banks to Aa3 from Aa2.

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

Last Updated: February 12, 2009 13:15 EST