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European Stocks Fall Amid U.S. Sales, Job-Claims Reports

European stocks fell to a two-month low as investors weighed U.S. retail-sales and jobless-claims data to gauge whether the Federal Reserve will decide next week to pare stimulus.

John Wood Group Plc plunged the most since July 2011 after saying 2014 earnings before interest, taxes and amortization at its engineering unit may drop by about 15 percent. PSA Peugeot Citroen tumbled 7.6 percent after disclosing a charge of about 1.1 billion euros ($1.5 billion) in its auto operations and cutting its savings estimate from a partnership with General Motors Co. Ziggo NV surged to a record after Liberty Global Plc revived talks to acquire the company.

The Stoxx Europe 600 Index dropped 1 percent to 310.24 at the close, for its lowest level since Oct. 9. The benchmark gauge has retreated for three days as U.S. economic data fueled speculation the Fed could slow the pace of additional stimulus sooner than forecast.

“According to various sources, tapering is expected between January and March, so earlier could have some negative impact,” Christoph Riniker, head of strategy research at Julius Baer Group Ltd. in Zurich, said in an interview. “Our view is that there is no year-end rally as the performance in the year was very good and investors are too optimistic at the moment.”

National benchmark indexes dropped in all 18 western European markets. The U.K.’s FTSE 100 slid 1 percent, France’s CAC 40 fell 0.4 percent and Germany’s DAX lost 0.7 percent.

Fed Policy

The U.S. central bank may consider reducing its $85 billion of monthly bond purchases at its Dec. 17-18 meeting, according to 34 percent of economists surveyed Dec. 6 by Bloomberg, up from 17 percent in a Nov. 8 poll.

A U.S. Commerce Department report in Washington showed retail sales in the world’s largest economy rose 0.7 percent in November, the biggest gain since June. The median estimate in a Bloomberg survey estimated an increase of 0.6 percent. Separate data showed initial jobless claims increased to 368,000 in the week ended Dec. 7 from a revised 300,000 in the previous week. Economists had predicted a gain to 320,000.

Euro-area industrial production shrank 1.1 percent in October, according to a report from the European Union’s statistics office in Luxembourg. The median estimate survey predicted an expansion of 0.3 percent.

Profit Contraction

Wood Group tumbled 9.9 percent to 718 pence, its lowest price since July 9, 2012. The U.K. oil-services provider said delays in offshore projects and weakness in its Canadian market may lead to the reduction in its 2014 engineering-unit profit.

Peugeot dropped 7.6 percent to 10.63 euros. Profit this year will take a hit of about 1.1 billion euros because of foreign-exchange swings, while savings from an alliance with General Motors Co. will be about 40 percent less than planned.

Peugeot and GM expect the savings to total $1.2 billion by 2018, lower than their previous target for $2 billion by 2016. The companies dropped plans to cooperate on subcompact vehicles.

Ziggo rallied 5.4 percent to 32.50 euros, its highest price since its initial public offering in March 2012. The number of shares that changed hands in the first 90 minutes of trading was more than double of the average full-day volume of the past three months.

The Dutch broadband provider said it is in discussions with Liberty Global for a potential offer. The cable company controlled by billionaire John Mallone already owns 30 percent of Ziggo.

Fortum Oyj rose 2.4 percent to 17.25 euros, the highest price since April 2012, after saying it will sell its Finnish power-distribution business for 2.55 billion euros to Suomi Power Networks Oy. Fortum will book a one-time sales gain of as much as 1.9 billion euros.

UCB SA gained 3.5 percent to 50.33 euros. Barclays Plc upgraded the Belgian drugmaker’s shares to overweight, a rating similar to buy, from equal weight. The company will make progress in the development of blockbuster drugs and triple its Ebit in five years, the brokerage said.

To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net

To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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