Sept. 29 (Bloomberg) -- European stocks declined, with benchmarks falling from 3-year highs. DaimlerChrysler AG, Nestle SA and GlaxoSmithKline Plc dropped amid concern gains this month may not be justified by the earnings outlook.

``After yesterday's good performance there's some profit taking going on,'' said Stephan Thomas, a fund manager at Frankfurt Trust which oversees $16 billion.

Boots Group Plc paced a drop in retailers after the company said sales fell for a third straight quarter.

The Stoxx 600 lost 0.3 percent to 296.47 as of 11:15 a.m. in London, after yesterday reaching the highest since April 22, 2002, for the second time this week. The Euro Stoxx 50, a benchmark for the 12 nations sharing the euro, and the Stoxx 50 dropped 0.4 percent.

Ten of the 18 Western European markets that were open declined. Germany's DAX Index fell 0.4 percent and France's CAC 40 Index fell 0.4 percent. Both climbed to the highest in more than three years yesterday. The U.K.'s FTSE 100 Index declined 0.2 percent, after yesterday reaching a four-year high.

The Stoxx 600 has added 7.7 percent in the third quarter, heading for its biggest advance since 2003, even as oil prices surged to all-time highs.

Boots Earnings

DaimlerChrysler, the world's fifth-biggest carmaker, dropped 1.5 percent. The shares yesterday reached a four-year high. Nestle, the world's largest foodmaker, lost 0.7 percent to 378.25 Swiss francs. GlaxoSmithKline, the U.K.'s largest drugmaker, declined 0.6 percent to 1,432 pence.

Boots dropped 2.2 percent to 615.5 pence. The owner of the largest U.K. drugstore chain said sales at Boots The Chemist stores open at least a year declined 1.6 percent in the fiscal second quarter, a third straight quarterly decline as slack demand and rising competition hampered Chief Executive Richard Baker's efforts to restore growth. That compares with the median analyst estimate for a drop of 1 percent.

The Stoxx 600 Retail Index was the worst performing industry group on the broader benchmark, falling 0.6 percent.

Vestas Wind Systems A/S, the world's largest windmill maker, rose 4.1 percent to 144.75 Danish kroner, the best performer on the Stoxx 600. Norwegian windpower production will increase 18 times by 2020 as almost half of all new electricity output will come from wind turbines, Aftenposten said, citing a director of the country's Water Resources and Energy Directorate.

Numico, Danone

Royal Numico NV, Europe's largest maker of baby foods, added 0.4 percent to 36.43 euros and Groupe Danone, the world's largest yogurt maker, fell 1.5 percent to 91.6 euros. Numico said it is not in talks with Danone after a French magazine reported that Danone may buy the Dutch company to fend off takeover challenges from predators.

Food and Beverage stocks were the second-worst performing among the 18 industry groups on the Stoxx 600, falling 0.5 percent.

HMV Group Plc, the U.K. operator of HMV music stores and Waterstone's bookshops, slumped 4.8 percent to 200 pence. Joseph Spooner, an analyst at ABN Amro cut the share recommendation of HMV to ``hold'' from ``add'' and cut the share-price forecast 13 percent to 225 pence.

HMV dropped plunged 12 percent yesterday after the company said sales at outlets open at least a year fell 4.4 percent in the last four months.

Corus Upgrade

Corus Group Plc gained 2.4 percent to 53.75 euros. Andrew Snowdowne, a London-based UBS AG analyst, raised the share recommendation of the U.K.'s No. 1 steelmaker to ``buy'' from ``neutral,'' citing a boom in China's construction industry next year. Chinese construction grew 30 percent in July, leading UBS to predict another surge in demand for steel, Snowdowne wrote in a note to clients.

A.P. Moeller-Maersk A/S, the world's largest container- shipping company, dropped 1.8 percent to 63,900 Danish kroner. The cost of shipping liquefied petroleum gas fell from a four- year high as an increasing number of vessels were free to bid for cargoes in the Persian Gulf in the first half of October, forcing shipowners to cut prices, according to Oslo-based shipbroker Fearnleys.

To contact the reporter on this story: Chris Fournier in Frankfurt at Cfournier3@bloomberg.net

Last Updated: September 29, 2005 06:22 EDT