Most European stocks fell after German exports dropped and investors speculated recent gains have overshot the outlook for company profits as Alcoa Inc. prepared to kick off the U.S. earnings season.
Debenhams Plc slid the most in more than three years after the retailer cut its profit-margin forecast. Vodafone Group Plc added 1.7 percent as the Wall Street Journal reported that Verizon Communications Inc. said it’s feasible it will buy the U.K. company’s stake in their Verizon Wireless joint venture. TGS Nopec Geophysical ASA rallied 7 percent as the Norwegian offshore surveyor forecast revenue that exceeded estimates.
The Stoxx Europe 600 Index slipped 0.1 percent to 286.25 at the close of trading, as three shares fell for every two that gained. The volume of trading was 46 percent greater than the 30-day average, Bloomberg data show. The measure climbed to the highest level since February 2011 last week after U.S. lawmakers agreed on a compromise budget.
“We have to realize that economic data coming out of the euro zone is going to be very poor,” Bob Parker, senior adviser at Credit Suisse Asset Management in London, said on Bloomberg Television. “I would want to diversify in equities across the euro zone. Markets are going to be frustrating. We are going to see a lot of day-to-day volatility.”
National benchmark indexes declined in 10 of the 18 western European markets. Germany’s DAX Index slipped 0.5 percent and the U.K.’s FTSE 100 dropped 0.2 percent. France’s CAC 40 was little changed.
The Stoxx 600 has increased 2.4 percent in 2013, pushing its valuation to 19 times reported earnings, near the highest level since March 2010, according to data compiled by Bloomberg.
German exports declined more than forecast in November. Exports adjusted for working days and seasonal changes fell 3.4 percent from October, the steepest drop in more than a year, the Federal Statistics Office in Wiesbaden said today. Economists had forecast a 0.5 percent decrease, according to the median of nine estimates in a Bloomberg survey.
Still, economic confidence in the euro area increased more than economists expected in December even as the 17-nation currency bloc remained mired in its second recession in four years. An index of executive and consumer sentiment rose to 87 from 85.7 in November, the European Commission said. Economists had forecast a reading of 86.3, according to a Bloomberg survey.
Alcoa, the largest American aluminum producer, will unofficially start the U.S. earnings-reporting season after New York trading closes today. Profits at S&P 500 companies grew an average 2.9 percent in the fourth-quarter, according to data compiled by Bloomberg. Excluding financial companies, income rose 0.5 percent.
“Expectations going in the fourth-quarter reporting season are weak, with many analysts scaling back their estimates in September,” Ishaq Siddiqi, a market strategist at ETX Capital in London, wrote in e-mailed comments. “Outlook statements will be the key, setting the tone for the rest of the year.”
Debenhams sank 7.7 percent to 108.1 pence, the biggest decline since March 2009. The U.K.’s second-largest department-store chain cut its forecast for full-year margin growth as it stepped up promotions to gain shoppers.
A gauge of automobile companies was the worst performer among 19 industry groups in the Stoxx 600. Car sales in western Europe slid 16 percent in December, LMC Automotive said in a report yesterday.
Bayerische Motoren Werke AG lost 3.4 percent to 73.21 euros, while Daimler AG declined 1.3 percent to 42.50 euros. Renault SA slipped 2 percent to 39.67 euros.
Michael Page International Plc and Hays Plc slid 3.8 percent to 398.8 pence and 1.5 percent to 84.55 pence, respectively. The U.K. recruitment companies retreated as smaller rival Robert Walters Plc said the market is still challenging and there’s yet to be any indication the situation will improve this year. Robert Walters closed unchanged at 203 pence, erasing an earlier loss of as much as 5.9 percent.
Galp Energia SGPS SA declined 3.8 percent to 12.05 euros. The shares were downgraded to neutral from buy at Bank of America Corp., citing “potentially weak” fourth-quarter earnings and 2013 guidance.
Vodafone advanced 1.7 percent to 162.4 pence, the highest since Dec. 13. Verizon Communications Chief Executive Officer Lowell McAdam said his company has the strength to buy Vodafone’s 45 percent stake in the U.S.’s largest wireless carrier, the Journal reported late yesterday.
TGS Nopec soared 7 percent to 193 kroner in Oslo, the biggest gain since October 2011. The offshore surveyor forecast 2012 revenue of $931 million and sales this year of $970 million to $1.05 billion.
Actelion Ltd. climbed 3.4 percent to 46.26 Swiss francs after the drugmaker reiterated its 2013 guidance of matching last year’s figures and forecast a “double-digit percentage growth” in 2015.
Anglo American Plc advanced 1.4 percent to 2,028 pence as the mining company appointed Mark Cutifani as chief executive officer after losing $14 billion of its market value under predecessor Cynthia Carroll.