European stocks dropped for a second day amid concern that rising energy costs following revolts in the Middle East and North Africa will hurt the global economy.
Daimler AG led automakers lower, sliding 2.8 percent. Swiss Life Holding AG sank 3.3 percent after Switzerland’s biggest life insurer reported operating profit that missed analysts’ estimates. Celesio AG plunged 6.2 percent as DZ Bank AG recommended selling the drug wholesaler’s shares.
The Stoxx Europe 600 Index retreated 0.7 percent to 282.76 at the 4:30 p.m. close in London. The measure has declined 2.9 percent since peaking at a 2 1/2-year high on Feb. 17, trimming this year’s advance to 2.5 percent, as opponents of Libya’s ruler Muammar Qaddafi took over large parts of the country, sending the price of oil soaring.
“The news flow from the Middle East increases the risk premium,” said Lars Schickentanz, chief investment officer at Prima Sgr in Milan. “The market will consolidate if no further oil spike occurs, and correct if oil spikes further. Macro data are good, but will weaken going forward.”
Crude for April delivery gained as much as 2 percent to $101.59 a barrel in electronic trading in New York as Libyan rebels braced for renewed attacks by Qaddafi loyalists and reports showed Iranian protesters clashed with security forces in Iran, the second-largest producer in the Organization of Petroleum Exporting Countries.
In Europe, producer-price inflation accelerated more than economists forecast in January as soaring energy costs added to the European Central Bank’s concerns that inflationary pressures are building. The ECB is due to meet tomorrow to make its monthly decision on interest rates.
The VStoxx Index, which measures the cost of protecting against a decline in shares on the Euro Stoxx 50 Index, climbed 3.3 percent to 24.6, after surging 4.9 percent yesterday.
Stocks fell even after a private report showed companies in the U.S. added more workers in February than forecast, indicating that the labor market may be strengthening. Employment increased by 217,000 last month after a revised 189,000 gain in January, according to figures from ADP Employer Services. The median estimate in the Bloomberg News survey called for a 180,000 gain last month.
The report comes two days before the Labor Department’s February jobs data, which economists say may show payrolls grew by 193,000 workers, the most since May 2010, after a 36,000 gain in January.
National benchmark indexes retreated in 16 of the 18 western European markets today. The U.K.’s FTSE 100 Index fell 0.4 percent, while Germany’s DAX and France’s CAC 40 declined 0.6 percent and 0.8 percent, respectively.
Carmakers dropped the most among all industry groups in the Stoxx 600 as the shares of companies whose earnings are most tied to economic growth retreated. Daimler, the world’s second-biggest maker of luxury cars, fell 2.8 percent to 49.6 euros.
Swiss Life fell 3.3 percent to 147.30 Swiss francs after the insurer said profit from operations rose 23 percent to 694 million francs ($753 million) last year. That missed the 797 million-franc average estimate of six analysts surveyed by Bloomberg.
Celesio slumped 6.2 percent to 18.52 euros as DZ Bank cut its rating on the shares to “sell” from “buy,” citing a “cloudy” outlook for 2011.
Essilor International SA dropped 3 percent to 51.08 euros even after the world’s largest maker of lenses for glasses said it’s targeting sales growth of 6 percent to 8 percent in 2011. CA Cheuvreux cut its rating to “underperform” from “outperform,” saying that while results were solid, the upside is limited.
Neopost SA dropped 5.2 percent to 65.80 euros even after Europe’s biggest maker of mailroom equipment said fourth-quarter sales rose 8.6 percent to 261.1 million euros.
Verbund AG sank 6.9 percent to 25.90 euros, the largest drop in the Stoxx 600. Austria’s biggest utility said 2010 profit fell to 400.8 million euros from 644.4 million euros in 2009. Analysts had forecast earnings of 432 million euros, according to the median of nine estimates compiled by Bloomberg.
Standard Chartered Plc increased 4.3 percent to 1,688 pence after saying profit rose 28 percent to a record $4.33 billion last year as its costs for bad loans fell. The lender predicted “double-digit” income growth for 2011 even as a U.K. bank levy weighs on earnings.
ITV Plc surged 9.3 percent to 93.45 pence, the biggest jump since 2009. The U.K.’s biggest free-to-air commercial broadcaster said profit almost tripled last year on a rebound in television advertising and as the company cut costs.
Micro Focus International Plc jumped 9.5 percent to 311.6 pence, the biggest gain in 15 months, amid speculation the U.K. software company may be a takeover target.
“Bid rumors are doing the rounds,” said Will Hedden, a sales trader at IG Index in London. “We saw the newswire earlier about SAP being a possible buyer, since then we heard there may be another. It’s not surprising that they are a potential target after that sharp fall last month.”
Bouygues SA advanced 3 percent to 34.21 euros. The French construction, television and telecommunications company said sales will increase by 2 percent in 2011, after posting earnings for 2010 that beat analyst estimates.
Arkema SA surged 8 percent to 57.78 euros as the maker of acrylics said that it will meet its 2015 objectives. The company reported 2010 net income of 347 million euros, topping the average analyst estimate of 313 million euros.