European stocks declined for the first time in five days as investors awaited the outcome of today’s Federal Reserve meeting to see whether it plans to pump more money into the economy.
Statoil ASA sank 5.4 percent after Norway’s biggest oil and gas company cut its production forecast. Anheuser-Busch InBev NV dropped the most in three months as the brewer’s profit growth missed estimates. Gambling companies Bwin Interactive Entertainment AG and PartyGaming Plc tumbled more than 7 percent as Barclays Plc downgraded the shares.
The Stoxx Europe 600 Index slipped 0.4 percent to 266.51 at the 4:30 p.m. close of trading in London. The Fed concludes a two-day meeting after the close of European trading today and will likely pledge to purchase $500 billion or more in securities to support growth, according to 29 of 56 economists surveyed by Bloomberg.
“The market’s expectations on the outcome of the Fed meeting are very high and we’re in a tense situation at the moment,” said Jens Finkbeiner, who oversees about $210 million at F+M Financial GmbH in Frankfurt. “We should see a clear trend after the meeting but the question is of course: in which direction? I do not exclude the possibility of a correction as the market has been rising sharply.”
The Stoxx 600 has rallied 6.1 percent since Aug. 27, when Federal Reserve Chairman Ben S. Bernanke said the bank “will do all that it can” to keep the economic recovery on track.
National benchmark indexes declined in 15 of the 18 western European markets today. The U.K.’s FTSE 100 slipped 0.2 percent. France’s CAC 40 and Germany’s DAX dropped 0.6 percent. Spain’s IBEX 35 slid 1.8 percent amid renewed concern that the region’s weakest economies will struggle to fund their budget deficits.
“There are concerns again,” said Luis Benguerel, a trader at Interbrokers Espanola de Valores in Barcelona. “The bond market is telling you some problems in Europe’s economies are far from over.”
The cost of insuring Irish sovereign debt surged to a record as credit-default swaps on Allied Irish Banks Plc subordinated debt signaled a 63 percent probability of default within five years.
The U.S. Institute for Supply Management’s index of non-manufacturing businesses, which covers about 90 percent of the American economy, rose to 54.3 in October from 53.2 a month earlier, the group said today. Other releases showed U.S. factory orders and company payrolls climbed more than forecast.
The data followed yesterday’s U.S. midterm elections, in which the Republicans took control of the House while falling short of winning a majority in the Senate.
Statoil slid 5.4 percent to 122.4 kroner after cutting its full-year production target because of halts at fields and missing analysts’ estimates for adjusted profit.
AB InBev retreated 3.2 percent to 43.45 euros, the biggest drop since Aug. 6. The world’s largest brewer reported third-quarter profit growth that missed analysts’ estimates because of increased spending on advertising and the cost of expansion in emerging markets.
Bwin plunged 7.1 percent to 30.08 euros and PartyGaming tumbled 7.5 percent to 221.1 pence as the online gambling companies that are in the process of merging were cut to “underweight” from “overweight” at Barclays. The brokerage cited “concerns over future regulation” with “downside risk from German and Greek regulation.”
Logica Plc declined 3.2 percent to 129 pence, leading a measure of technology shares to the biggest drop among 19 industry groups in the Stoxx 600. The Anglo-Dutch computer-services provider said third-quarter orders fell 8.6 percent, citing “fewer large deals closing in the summer” and “slower decision making in the U.K. public sector.”
Next Plc dropped 2.2 percent to 2,180 pence, leading retailers lower. The U.K.’s second-biggest clothing retailer forecast a “tougher” end to the year after a sales decline worsened in the third quarter.
Cobham Plc plunged 9.5 percent to 211.5 pence after the world’s largest maker of airborne-refueling equipment said organic profit growth may be limited this year, held back by delays to defense and security contracts in the U.S.
Meda AB slid 8 percent to 50.5 kronor after Sweden’s second-largest health-care company said nine-month sales fell to 8.56 billion kronor ($1.3 billion) from 9.92 billion kronor the same period last year.
Spanish Stocks Slide
Spain’s IBEX 35 sank the most in six weeks as Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA retreated.
BBVA, which yesterday said it will hold a 5.06 billion-euro ($7 billion) rights offer to help fund the purchase of a stake in Turkiye Garanti Bankasi AS, fell 3.5 percent to 8.90 euros.
Santander, Spain’s biggest bank, dropped 3.5 percent to 8.69 euros as Antonio Horta-Osorio left as head of the U.K. unit to join Lloyds Banking Group Plc. Lloyds, Britain’s largest mortgage lender, increased 2.7 percent to 69.2 pence.
Societe Generale SA climbed 1.9 percent to 42.91 euros after France’s second-largest bank said profit more than doubled. Third-quarter net income rose to 896 million euros from 426 million euros a year earlier, the Paris-based lender said. That beat the 688 million-euro average analyst estimate.
Coloplast A/S, the world’s largest maker of ostomy and urology products, surged 10 percent to 742 kroner, the highest level since at least 1995. Fourth-quarter net income of 368 million kroner ($69.3 million) exceeded the 345 million-krone average estimate in a Bloomberg survey of nine analysts.
Lundin Petroleum AB climbed 7.9 percent to 67.95 kronor after Sweden’s largest oil explorer reported net income of $26.6 million. Analysts had estimated net income of $21.8 million, according to a survey compiled by Bloomberg.