Dec. 22 (Bloomberg) -- European stocks may drop following declines in U.S. equities yesterday after a report showed a slump in factory output. BHP Billiton and Rio Tinto Group might lead mining companies lower as copper prices fell to a six-month low.

``European markets are likely to take their cue from the negative close we saw on U.S. benchmarks yesterday,'' said Andrew French, an equity salesman at E*Trade Securities Ltd. in London. ``Mining stocks, in particular, are looking a bit wobbly.''

British Airways Plc, Europe's third-largest airline, might be active after canceling some flights for a third day because of bad weather in London. Elcoteq SE, a contract manufacturer for mobile-phone makers such as Nokia Oyj, may retreat after cutting its profit outlook.

March futures on the Euro Stoxx 50 Index, a benchmark for the 12 countries using the euro, dropped 7 to 4134 as of 7:45 a.m. in London. The U.K.'s FTSE 100 Index may fall 16 to 6168, according to CMC Markets in London.

SAP AG and Cap Gemini SA may move after Research In Motion Ltd., the U.S. maker of BlackBerry e-mail devices, forecast sales that may beat analysts' estimates and Red Hat Inc., a software distributor, had better-than-expected profit.

The Standard & Poor's 500 Index fell yesterday after a Federal Reserve survey showed manufacturing in the Philadelphia region contracted this month.

The Fed Bank of Philadelphia's general economic index sank to minus 4.3 from 5.1 in November, signaling business was weakening, according to data released after the close of trading in Europe.

Earlier, the economy of Europe's largest trading partner grew at a 2 percent annual rate in the third quarter, less than the 2.2 percent estimated last month, the Commerce Department said.

Reports today may indicate durable orders rebounded in November and personal spending increased.

Copper Drops

Shares of BHP Billiton, the world's largest mining company, and Rio Tinto, the world's third-largest, fell in Australia.

Copper futures in Shanghai declined the maximum daily limit on concern slower economic growth in the U.S. and China, the world's two biggest copper consumers, may reduce demand for the industrial metal.

China's economy may expand 9.8 percent in 2007, which is slower than the previous forecast of 10 percent, a report by the Chinese central bank said today.

U.S. reports today will probably show U.S. durable goods rose in November by 1.3 percent, the median estimate in a Bloomberg survey of 64 economists. Demand for goods made to last at least three years dropped in October by 8.3 percent, the most in six years, pointing to a deepening economic slowdown. The report is due at 8:30 a.m. New York time.

Personal spending probably increased 0.6 percent last month, three times the October gain, according to a Bloomberg News survey of 66 economists. The Commerce Department report is also due at 8:30 a.m. New York time.

Canceling Flights

British Airways canceled domestic flights at London Heathrow airport and some short-haul flights to Europe due to dense fog, stranding thousands of passengers at Europe's busiest airport.

Traffic controllers yesterday cut the number of flights in and out of Heathrow, causing about around 315 cancellations at the airport, BAA said in an e-mailed statement. British Airways cut all domestic flights and some elsewhere to Europe from the airport on Dec. 20.

Elcoteq reduced its sales and operating profit outlook for the fourth quarter after production volumes fell and competition intensified.

The company expects fourth-quarter sales to be ``slightly lower'' than in the third quarter, while operating profit will be half of that in the preceding quarter, the company said in a statement to the Helsinki exchange.]

SAP, Cap Gemini

SAP, the world's largest maker of business-management software, and Cap Gemini, Europe's largest computer-services company, might be active.

Research In Motion said earnings in the fourth quarter will be 95 cents to $1.02 excluding some costs and sales will be $900 million to $940 million. Analysts predict profit minus costs of 95 cents, the average estimate in a Bloomberg survey, on sales of $847.8 million.

Red Hat, the biggest distributor of Linux software, had third- quarter profit excluding some items of 14 cents a share, exceeding the average estimate of 12 cents among analysts surveyed by Bloomberg.

Porsche AG, maker of the 911 sports car, and Volkswagen AG, Europe's largest carmaker, might be active. Toyota Motor Corp. expects demand for its fuel-efficient vehicles in the U.S., Asia and Europe to raise sales 6 percent in 2007, likely ending General Motor Corp.'s 81-year reign as the world's largest carmaker.

Toyota's vehicle sales, including those of affiliates Daihatsu Motor Co. and Hino Motors Ltd., will probably total 9.34 million vehicles next year, up from 8.8 million this year, the company said in a statement in Nagoya, Japan.

Premier Foods, First Choice

Premier Foods Plc might be active. The U.K. food company that's acquiring competitor RHM Plc said full-year sales will be at the lower end of its forecast because of increased commodity prices and energy costs.

Annual sales from continuing operations will rise 20 percent, while revenue excluding acquisitions will be in line with its goals, St. Albans, England-based Premier said today.

First Choice Holidays Plc, a U.K. travel operator, is in exclusive talks to buy Laterooms.com, an Internet-based hotel booking service, for as much as 110 million pounds ($216 million), the Daily Telegraph reported today, without saying where it obtained the information.

SABMiller Plc, which bought Foster's Group Ltd.'s Indian brewing unit in September, may buy at least a 50 percent stake in India's Mount Shivalik Industries, the EconomicTimes reported, without saying where it got the information. Mount Shivalik accounts for six percent of the domestic beer market,

Nigel Fairbrass, a spokesman for SABMiller, was not immediately available to confirm or deny the report.

The S&P 500 closed down 5.23, or 0.4 percent, to 1418.30 yesterday. The Dow average retreated 42.62, or 0.3 percent, to 12,421.25. The Nasdaq Composite Index dropped 11.76, or 0.5 percent, to 2415.85. The index is down for four straight days, its longest losing streak in four months.

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

Last Updated: December 22, 2006 02:50 EST