European Stocks Fall on U.S. Payrolls Data; Wacker Drops

European stocks declined, extending their weekly drop, as a government report showed U.S. employers added fewer jobs than forecast in April.

Hays Plc and Randstad Holding NV led losses in recruitment companies, sinking more than 5 percent. Wacker Chemie AG, the world’s second-biggest maker of solar-grade silicon, slumped 6.1 percent after net income dropped. Taylor Wimpey Plc, a U.K. homebuilder, slid 7.7 percent as the nation’s house prices fell the most in 1 1/2 years. BHP Billiton Ltd. and Rio Tinto Group led mining companies lower.

The Stoxx Europe 600 Index retreated 1.8 percent to 253 at the close of trading, the lowest level since April 23. The benchmark gauge tumbled 2.4 percent this week, trimming its 2012 advance to 3.5 percent, as Spain entered a recession and reports on U.S. business activity and services-industry growth trailed economists’ forecasts.

“The U.S. labor-market report will further erode investor confidence,” said Markus Allenspach, head of bond research at Julius Baer Group Ltd. in Zurich. “The financial market can digest one or two negative surprises, but if the negative surprises become the rule and not the exemption, as it is the case now, investors are fast in reducing their positions.”

Thirteen companies in the Stoxx 600 were trading without the right to the latest dividend payment today, dragging the index 0.38 points lower, according to data compiled by Bloomberg. The volume of shares changing hands was 3.2 percent greater than the 30-day average.

U.S. Payrolls

U.S. payrolls climbed by 115,000 last month, the smallest gain in six months, after a revised 154,000 increase in March that was more than initially estimated, Labor Department figures showed today. The median estimate of 85 economists surveyed by Bloomberg called for a 160,000 advance.

The jobless rate fell to a three-year low of 8.1 percent as people left the labor force.

In Europe, four elections this weekend have the potential to reshape the region’s political map and show how the response to the financial crisis remains hostage to the whims of voters on both sides of the region’s economic divide.

Recession-weary Greeks will pick a new government and polls show the French will probably elect the first Socialist president since 1995. Local elections will test Italy’s political pulse, and voters in a northern German state may deal a symbolic blow to Chancellor Angela Merkel’s coalition.

‘More Uncertainty’

“Elections in Europe will not bring support to the markets in our view as their outcomes will probably carry more uncertainty,” said Jean-Paul Jeckelmann , chief investment officer at Banque Bonhote & Cie. in Neuchatel, Switzerland. “The news flow in Europe has been poor in the last few weeks. That gives market participants the opportunity to take some chips from the table and stay on the sidelines until we get a clearer view on what’s really going on.”

Euro-region services and manufacturing output contracted more than initially estimated in April, adding to signs the economy is struggling to regain strength. A composite index based on a survey of purchasing managers in both industries dropped to 46.7 from 49.1 in March, London-based Markit Economics said today. That’s less than an estimate of 47.4 published on April 23. Readings below 50 indicates contraction.

Hays slid 8.4 percent to 83.35 pence in London, the biggest drop since 2008, and Randstad lost 5.2 percent to 24.28 euros in Amsterdam. Michael Page International Plc retreated 5.4 percent to 385 pence.

Wacker Chemie

Wacker Chemie tumbled 6.1 percent to 59.80 euros, the largest decline in two months. First-quarter net income dropped to 40 million euros from 168 million euros a year ago. The company said it sees its 2012 earnings before interest, taxes, depreciation and amortization “markedly” below its 2011 level.

Taylor Wimpey, the U.K.’s second-largest homebuilder by volume, dropped 7.7 percent to 47.69 pence, the steepest fall since August. Barratt Developments Plc, the biggest, sank 7.5 percent to 124.3 pence.

U.K. house prices dropped the most in 1 1/2 years in April as a stamp-duty exemption for first-time buyers ended and the economy fell into its first double-dip recession since the 1970s, according to Halifax. Prices declined 2.4 percent from March, the mortgage unit of Lloyds Banking Group Plc said.

BHP Billiton, the world’s biggest mining company, decreased

3.9 percent to 1,918 pence and Rio Tinto fell 4.4 percent to 3,214.5 pence as a gauge of basic-resources companies was the worst performer among the 19 industry groups in the Stoxx 600 today. Xstrata Plc slid 3.1 percent to 1,131.5 pence.

Debenhams Declines

Debenhams Plc, the U.K.’s second-biggest department-store company, lost 5.9 percent to 80.4 pence, its first retreat in eight days, as Liberum Capital Ltd. downgraded the shares to sell.

Home Retail Group Plc, the owner of the Argos and Homebase chains, slipped 2.5 percent to 81.25 pence. The stock plunged 24 percent this week, the biggest drop since the company was split off from GUS Plc in 2006, after saying on May 2 that it won’t pay a final dividend.

Belgacom SA, Belgium’s largest telephone company, advanced

1.3 percent to 21.76 euros after first-quarter profit of 199 million euros beat the average 194 million-euro analyst estimate.

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