Nov. 20 (Bloomberg) -- European stocks dropped for a fourth day, the longest losing streak in four months, as European Central Bank President Jean-Claude Trichet indicated policy makers may withdraw emergency stimulus measures.

National Bank of Greece SA led the nation’s lenders lower as the ECB said it’s amending requirements for some securities it accepts in exchange for liquidity. Hammerson Plc and British Land Co. led a decline by property companies as the U.K.’s biggest customer-owned lender said house prices may fall next year amid increasing unemployment. TUI Travel Plc and Thomas Cook Group Plc slid more than 4 percent after Morgan Stanley downgraded Europe’s two largest travel operators.

The Dow Jones Stoxx 600 Index fell 0.8 percent to 243.62, extending this week’s decline to 1.7 percent. The gauge has surged 54 percent since March 9, amid signs government spending and record-low interest rates are helping to drag the economy out of recession.

“Volumes are dropping off as more and more people draw a line under the year and risk levels are rising,” said Justin Urquhart Stewart, who oversees about $3.3 billion as director of 7 Investment Management in London. “At some stage we are going to get a leg down again. You have to question where growth is going to come from.”

New York Stock Exchange trading averaged 1.18 billion shares a day this month through Nov. 17, the lowest since July, which was an 11-month low, according to data compiled by Bloomberg.

Emergency Cash

Stocks erased an earlier advance as Trichet said the bank will gradually withdraw the emergency cash it has pumped into the economy in order to ensure it doesn’t fuel inflation.

“Not all our liquidity measures will be needed to the same extent as in the past,” Trichet said at a conference in Frankfurt today. “Any non-standard measure whose continuation would pose a threat to the achievement of price stability must be undone promptly and unequivocally.”

Benchmark stock indexes retreated in 15 of the 18 western European markets. France’s CAC 40 slid 0.8 percent, Germany’s DAX declined 0.7 percent and the U.K.’s FTSE 100 slipped 0.3 percent. Greece’s ASE Index sank 3.7 to a three-month low.

National Bank of Greece, Alpha Bank SA and EFG Eurobank Ergasias, Greece’s three biggest lenders, led declines on the Stoxx 600. The ECB “will require at least two ratings from an accepted external credit assessment institution for all” asset- backed securities issued as of March 1, 2010, the central bank said today, adding that “not only the best, but also the second-best available rating must comply with the minimum threshold applicable to ABSs.”

National Bank, Piraeus

National Bank sank 5.8 percent 22.08 euros, Alpha Bank plummeted 5.8 percent 9.83 euros and Eurobank retreated 6.9 percent to 9.20 euros.

Piraeus Bank SA fell 3.6 percent to 10.30 euros after Greece’s fourth-biggest lender said net income in the first nine months of the year declined 50 percent to 219 million euros ($326 million) after it set aside more money to cover bad loans.

Hammerson, which owns stakes in shopping malls such as London’s Brent Cross, dropped 3.1 percent to 426.1 pence. British Land, Britain’s second-biggest real estate investment trust, slipped 2.7 percent to 473.4 pence. Land Securities Group Plc, the largest U.K. REIT, retreated 2.4 percent to 684 pence.

Nationwide Building Society Chief Executive Officer Graham Beale said the rise in U.K. house prices this year has been caused by a low number of properties available for sale and the trend may reverse next year, pushing property prices lower.

Bloomberg Survey

A separate Bloomberg survey of economists and real estate brokers showed British house prices will probably fall next year, and it may not take until 2014 to return to the levels at the 2007 peak of the country’s biggest housing boom.

TUI Travel dropped 4 percent to 245 pence and Thomas Cook fell 4.3 percent to 209.2 pence as Morgan Stanley lowered its recommendations for the tour operators, citing “a weaker operating environment and more expensive debt refinancing.”

TUI Travel was downgraded to “equal weight” from “overweight” and Thomas Cook was cut to “underweight” from “equal weight.”

Fiat SpA declined 4.9 percent to 10.01 euros, extending losses of 2.6 percent yesterday. The Italian carmaker was downgraded to “neutral” from “buy” at UBS AG.

Lottomatica SpA, which manages lottery games for the Italian government, slid 5 percent to 13.57 euros. Italy’s administrative court of the Lazio region annulled the auction of the concession of a scratch and win lottery won by Lottomatica, a company official said.

FLSmidth & Co. A/S, the world’s biggest maker of cement kilns, jumped 4.2 percent to 336 kroner, the second-biggest gain on the Stoxx 600, as Goldman Sachs Group Inc. raised the company to “buy” from “neutral.”

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

Last Updated: November 20, 2009 12:04 EST