Most European Stocks Drop as Nordea, Carnival Decline

Photographer: Ralph Orlowski/Bloomberg

A trader monitors financial data on his computer screens at the Frankfurt Stock Exchange in Frankfurt. Close

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Photographer: Ralph Orlowski/Bloomberg

A trader monitors financial data on his computer screens at the Frankfurt Stock Exchange in Frankfurt.

Most European stocks fell amid concern over budget talks in the world’s largest economy and as a report showed U.S. durable-goods orders excluding transportation unexpectedly dropped.

Nordea Bank AB slid 2.6 percent as Sweden sold its remaining stake in the Nordic region’s largest lender. Carnival Corp. (CCL), the world’s biggest cruise-ship operator, slumped 6.7 percent for the biggest drop in the Stoxx Europe 600 Index. ThyssenKrupp AG rallied 3.7 percent as Cevian Capital AB boosted its holding in the German steelmaker.

The Stoxx 600 dropped 0.1 percent to 313.02 at the close of trading, as three shares retreated for every two that gained. The gauge has still climbed 5.3 percent in September as the Federal Reserve refrained from reducing its monthly asset purchases. It has surged 9.8 percent since the end of June, heading for the biggest quarterly gain in four years.

“U.S. economic data continues to be of interest for market participants with the Fed tapering in the back of their minds,” said Peter Braendle, a portfolio manager at Swisscanto Asset Management AG in Zurich, where he helps oversee about $60 million. “The debt ceiling talks in the U.S. have resurfaced. I wouldn’t say it’s already causing uncertainty, but it’s a welcome argument for bears.”

National benchmark indexes rose in 11 of the 18 western European markets today. Spain’s IBEX 35 and Portugal’s PSI-20 each rallied 0.8 percent. France’s CAC 40 and Germany’s DAX were almost unchanged. The U.K.’s FTSE 100 declined 0.3 percent.

U.S. Economy

U.S. durable-goods orders, excluding the volatile transportation category, slipped 0.1 percent in August after falling a revised 0.5 percent the previous month, according to the Commerce Department. The median forecast of 60 economists in a Bloomberg News survey called for a 1 percent gain.

Americans are losing faith in the nation’s economic recovery even as forecasters expect growth to accelerate, according to a Bloomberg National Poll. Fewer people anticipate European Stocks Fluctuate Before U.S. Durable-Goods Orders Data improvement in the economy’s strength over the next year than in the last survey in June, with 27 percent saying the expansion will be more robust, down from 39 percent who expected improvement three months earlier.

Congress has yet to pass a budget for the fiscal year starting Oct. 1. U.S. lawmakers are also debating legislation to increase the government’s authority to borrow and pay bills, with the Treasury Department estimating the debt limit could be reached as soon as mid-October.

Lew Warning

U.S. Treasury Secretary Jacob J. Lew said investor confidence that a deal can be struck to raise the debt ceiling is “a bit greater than it should be.” Lew, who spoke at the Bloomberg Markets 50 Summit in New York yesterday, repeated that President Barack Obama won’t negotiate with congressional Republicans on increasing the $16.7 trillion limit on the nation’s borrowing authority. Republicans want to use the debate to undo parts of Obama’s health-care law.

Nordea (NDA) dropped 2.6 percent to 77.15 kronor, the biggest decline in four weeks. Sweden sold 284 million shares for 76 kronor each, valuing the 7 percent stake at 21.6 billion kronor ($3.4 billion).

Carnival fell 6.7 percent to 2,106 pence in London trading, the lowest price in more than a year. Morgan Stanley cut the stock to underweight, similar to a sell recommendation, from equal weight, citing the company’s valuation. Carnival slumped 5.6 percent yesterday after the cruise-ship operator said it may post a loss.

Tesco, Commerzbank

Tesco Plc, the U.K.’s largest retailer, fell 3.5 percent to 360.9 pence, the lowest price in two months, as JPMorgan Chase & Co. reduced the stock to underweight from neutral. The brokerage said the emergence of German discounters Aldi and Lidl may cause Tesco to go “through a painful rebasing of pricing and the gross margin, synonymous to a profit warning.”

Commerzbank AG dropped 6 percent to 8.78 euros, extending its two-day decline to 7.9 percent. The shares fell yesterday after Equinet AG downgraded the lender to hold from buy, citing its exposure to the shipping industry and possible need for another capital increase.

U.K. utilities retreated as Citigroup Inc. said rising energy prices may lead to government intervention. SSE Plc slid 5.8 percent to 1,489 pence and Centrica Plc fell 4.1 percent to 375.6 pence.

Ed Miliband, the leader of Britain’s opposition Labour Party, yesterday pledged to freeze energy bills if he wins the next election. Rising prices have enriched power companies at the expense of consumers, he said.

ThyssenKrupp Gains

ThyssenKrupp rose 3.7 percent to 18.16 euros, the largest rally in four months, as Cevian raised its stake to 5.2 percent. The Swedish investment company said it’s convinced of the steelmaker’s long-term potential.

Gas Natural SDG SA (GAS), Spain’s biggest gas supplier, advanced 4 percent to 15.45 euros and Enagas SA, the operator of the nation’s natural-gas pipelines, gained 1.1 percent to 18.24 euros. Goldman Sachs Group Inc. raised both stocks to buy from neutral, citing the impending review of gas regulation in Spain as positive for both companies.

Vodafone Group Plc climbed 1.9 percent to 217.2 pence, as a gauge of telecommunication companies posted the best performance of the 19 industry groups in the Stoxx 600. Orange SA, the company previously known as France Telecom, advanced 2.9 percent to 9.13 euros.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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