Aug. 11 (Bloomberg) -- European stock indexes fell from three-year highs as oil prices rose to a record and earnings from companies including Deutsche Telekom AG and RWE AG disappointed investors.

The Dow Jones Stoxx 50 Index lost 0.5 percent to 3169.36 at 12:54 p.m. in London. The Stoxx 600 also fell 0.5 percent. The Euro Stoxx 50, an index for the 12 countries using the euro, declined 0.7 percent.

ING Groep NV slid after reporting insurance profit that lagged behind consumer and online banking results. Ryanair Holdings Plc and Ciba Specialty Chemicals AG fell amid concern about energy costs.

``The oil price is the biggest risk to the market's rally,'' said Javier Galan, a fund manager at Renta 4 SA in Madrid, which oversees about $600 million. ``It's a good reason to take profits.'' He said he has recently reduced holdings of equities, without giving examples.

Oil producers limited the decline as the only group among 18 in the Stoxx 600 to climb.

Crude for September delivery rose to a record $65.30 a barrel in electronic trading on the New York Mercantile Exchange after advancing 2.9 percent yesterday. Oil futures recently retreated to $64.87, a 0.1 percent decline.

A report showed rising gasoline consumption in the U.S. and Iran's government said it restarted its uranium enrichment program, risking UN sanctions. The International Energy Agency, an adviser to 26 oil-consuming countries, today cut its forecasts for supply from Russia and other non-OPEC countries, placing further strain on supplies from the producer group.

A German government report today showed stalled economic growth amid record oil prices and unemployment near its highest level since World War II.

Benchmarks Decline

Benchmark indexes declined in all of the 18 Western European markets except Luxembourg and Norway, which was lifted by oil producers Statoil ASA and Norsk Hydro ASA. France's CAC 40 Index lost 0.6 percent, Germany's DAX Index fell 0.8 percent, and the U.K.'s FTSE 100 Index slipped 0.3 percent.

Ryanair, Europe's biggest low-cost airline, dropped 0.8 percent to 6.50 euros. Deutsche Lufthansa AG, the region's second- largest carrier, lost 0.7 percent to 11.21 euros. Energy makes up 30 percent of airlines' total costs, according to Credit Suisse First Boston estimates last month.

Ciba, the world's largest maker of detergent whiteners, slipped 0.6 percent to 79.35 Swiss francs. Chemical companies use raw materials derived from oil.

The Stoxx 600's measure of oil and gas stocks added 0.6 percent. Statoil increased 1.5 percent to 151.5 kroner. Norsk Hydro added 1.1 percent to 660 kroner.

``You want to own lots of oil stocks,'' said Stephen Docherty, who oversees $1.8 billion as head of global equities at Aberdeen Asset Management Plc in Glasgow, Scotland, and owns shares of Eni SpA and Total SA. ``The companies are generating so much cash.''

Federal Reserve

``When oil is over $65, that's a risk for stocks,'' said Guillaume Duchesne, an equity strategist at MeesPierson in Luxembourg, which manages $61 billion in assets. ``It can bring the possibility of inflation to the forefront.''

Federal Reserve policy makers raised their benchmark U.S. interest rate this week for a 10th straight time to stay ahead of inflation as the world's largest economy accelerates.

Deutsche Telekom, Europe's largest phone company, fell 2 percent to 16.13 euros. It reported a 63 percent increase in second-quarter profit as it won more wireless customers in the U.S. and Germany. That still missed the median estimate of 14 analysts surveyed by Bloomberg. The company said net income was hurt by a ``substantial'' increase in tax expenses.

RWE, ING

RWE lost 1.7 percent to 55.25 euros. The world's No. 2 publicly traded utility said second-quarter earnings climbed 4.6 percent, missing the median estimate of 11 analysts in a Bloomberg survey. Larger competitor E.ON AG yesterday reported a 15 percent rise in profit.

ING Groep slid 3.1 percent to 24.32 euros. Second-quarter earnings fell 6.6 percent to 1.55 billion euros. The largest Dutch financial-services company gets almost half its pretax profit from insurance. Quarterly earnings from that business slid 35 percent to 700 million euros.

Hannover Re slipped 4.6 percent to 30.78 euros. The world's No. 5 reinsurer said second-quarter profit rose 6 percent, missing analyst estimates, after a decline in premium income.

Technology shares had the biggest decline as a group in the Stoxx 600, falling 1.6 percent.

Alcatel, Ericsson Fall

Shares of Cisco Systems Inc., the world's largest maker of equipment that links computers, yesterday had their biggest decline in a year as the company forecast sales that may miss analysts' estimates.

``Telecommunication-equipment stocks are following Cisco's declines yesterday,'' Renta 4 SA's Galan said. ``When one of the biggest stocks in the industry falls so much, nearing its lowest levels, it doesn't bode well.''

Alcatel SA, the world's biggest supplier of broadband Internet equipment, lost 1.2 percent to 9.98 euros in Paris. Ericsson AB, the biggest maker of mobile-phone networks, fell 1.1 percent to 27.1 kronor.

Cisco also said yesterday that it isn't planning large acquisitions. The remark follows an Aug. 7 report in the Business newspaper that said Cisco may try to acquire Nokia Oyj, the world's largest mobile-phone maker. Nokia slid 2.3 percent to 13.16 euros.

Dairy Companies Drop

Shares of British dairy companies fell. Arla Foods U.K. Plc, the country's biggest supplier of milk to food retailers, said annual profit will miss analysts' estimates by as much as 10 percent as energy costs rise.

Arla Foods dropped 7.6 percent to 64.25 pence. Dairy Crest Group Plc, the U.K.'s largest maker of dairy products, decreased 7.2 percent to 478 pence. Robert Wiseman Dairies Plc, Scotland's biggest provider of fresh milk, slid 3.1 percent to 252 pence.

MAN AG added 2 percent to 40.55 euros. Europe's No. 3 truckmaker said second-quarter net income rose 33 percent, beating analysts' estimates, as transport companies replace aging fleets.

Synthes Inc. climbed 6 percent to 147.2 Swiss francs. The world's largest maker of devices to mend broken bones said first- half profit rose 53 percent after it bought a Swiss competitor and introduced products.

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

Last Updated: August 11, 2005 08:10 EDT