Nov. 13 (Bloomberg) -- European stocks fell for a third day, led by banks and commodity producers, as Germany sank into recession and the OECD forecast a global economic slump.

Barclays Plc slumped 6.2 percent, and BHP Billiton Ltd. sank 2.3 percent after the Organization for Economic Cooperation and Development reduced its outlook for global growth and predicted an ``extended period of financial headwinds.'' DSG International Plc tumbled 32 percent as the London's Times said the U.K. retailer had its supplier insurance pared back by Atradius.

The Dow Jones Stoxx 600 Index lost 0.6 percent to 204.08, pushing this year's retreat to 44 percent. Germany entered its worst recession in at least 12 years.

``We'll see equities go lower,'' said Andrew Lynch, who manages about $3 billion at Schroder Investment Management Ltd. in London. ``People will have to revise down further their outlook for corporate earnings'' to reflect the slowdown.

Earnings for the 1,530 companies in western Europe that reported results since Oct. 7 declined 17 percent on average, Bloomberg data show.

National benchmarks fell in eight of the 18 western European markets. The U.K.'s FTSE 100 lost 0.3 percent. Germany's DAX gained 0.6 percent, with Siemens AG rallying after Europe's biggest engineering company said it saw no cancellations of projects. France's CAC 40 climbed 1.1, led by GDF Suez SA on confirmation of its profit target.

Credit Losses

More than $30 trillion has been erased from the value of global equity markets this year as credit losses and writedowns totaled $950 billion in the worst financial crisis since the Great Depression.

Barclays, the U.K.'s second-biggest bank, sank 6.2 percent to 157.7 pence, and UBS AG, the largest Swiss bank, lost 4.9 percent to 15.08 francs.

BHP Billiton, the world's largest mining company, dropped 2.3 percent to 926.8 pence. Anglo American Plc, the fourth- biggest diversified mining company, fell 2.4 percent to 1,248 pence.

Gross domestic product in the countries sharing the euro currency will contract 0.5 percent next year and U.S. GDP growth will retreat 0.9 percent, according to the OECD. GDP in Japan will contract 0.1 percent in 2009, the Paris-based group said.

``Underlying the projections is an assumption that the extreme financial stress since mid-September is short-lived, but will be followed by an extended period of financial headwinds through late 2009,'' the group said.

GDP in Germany, Europe's largest economy, dropped a seasonally adjusted 0.5 percent from the second quarter, when it fell a revised 0.4 percent, a report showed today. Economists expected a 0.2 percent decline in a Bloomberg survey.

DSG, Metro

DSG tumbled 32 percent to 19.25 pence. DSG told the London Times that Atradius also reduced the insurance, which guarantees suppliers will be paid, on other companies. An Atradius official said electronics retailers were being hurt by the financial crisis, prompting the insurer to reduce cover in some cases, according to the newspaper.

Metro AG, owner of Media Markt and Saturn consumer- electronics shops, slid 9.9 percent to 23 euros after Handelsblatt said German sales of audio gear and televisions will fall in 2008's second half.

``After not buying cars, consumers may refrain from buying TVs, which would be bad for Media Markt and Saturn,'' Martina Noss, an analyst at Norddeutsche Landesbank in Hanover, Germany, said. She has a ``hold'' recommendation on the retailer's stock.

STMicroelectronics NV, Europe's largest maker of semiconductors, lost 3.2 percent to 5.967 euros. Infineon Technologies AG, the region's second-biggest, retreated 1.7 percent to 2.265 euros.

Cutting Forecast

Intel Corp., the world's largest semiconductor maker, cut its fourth-quarter revenue estimate by about $1 billion. The company cited ``significantly weaker'' demand across its entire product line.

Siemens AG gained 4.7 percent to 41.95 euros. Europe's largest engineering company said it sees no cancellations of projects and is not losing market share to Alstom SA. The company reported fourth-quarter profit that fell more than analysts estimated on costs for job cuts at rail-equipment and health-care units.

GDF Suez SA climbed 5 percent to 33.90 euros. The world's second-biggest utility confirmed its full-year earnings target after nine-month profit rose 19 percent on higher power and natural-gas prices.

Reed Elsevier Plc said it's ``on track'' for good sales growth, margin improvement and growth in adjusted earnings per share. The stock rose 8.7 percent to 531.5 pence.

BT Group Plc surged 9 percent to 122.5 pence. The company aims to cut about 6 percent of its workforce in the year through March to improve profitability after reporting a slide in second- quarter earnings.

Bayerische Motoren Werke AG, the world's largest maker of luxury cars, climbed 6.6 percent to 22.04 euros. BMW Finance NV, a unit of BMW, plans to sell five-year bonds in euros, according to a banker involved in the transaction.

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

Last Updated: November 13, 2008 12:07 EST