European stocks dropped, erasing a two-day gain, as Remy Cointreau SA and Pernod Ricard SA dragged food-and-beverage companies lower.
Remy sank the most since January 2009 after forecasting that annual profit will decline by at least 10 percent. Repsol SA advanced the most in 13 months as the governments of Spain and Argentina reached a preliminary agreement to compensate the Madrid-based oil company for its stake in YPF SA. Algeta ASA posted its biggest rally in more than two years after saying that Bayer AG has started talks to buy the Norwegian company.
The Stoxx Europe 600 Index slipped 0.6 percent to 322.24 at the close of trading. The equity benchmark has surged 15 percent this year as central banks around the world pledged to leave interest rates near record lows for a prolonged period.
“A small consolidation is taking place on the back of a few disappointing earnings reports in the beverage sector,” Ion-Marc Valahu, a co-founder and fund manager at Clairinvest in Geneva, wrote in an e-mail. “So far, it only looks like a short-term pull back.”
U.S. equity markets will close on Nov. 28 for the Thanksgiving public holiday.
National benchmark indexes declined in every western-European market except Spain and Iceland. The U.K.’s FTSE 100 retreated 0.9 percent and France’s CAC 40 dropped 0.6 percent. Germany’s DAX decreased 0.1 percent.
Remy slumped 8.3 percent to 66 euros after Chief Executive Officer Frederic Pflanz said on a conference call that profit may fall 20 percent. The maker of Remy Martin cognac forecast in a statement that operating profit will drop in its financial year through March, with trading worsening in the next six months, because of lower sales in China. The company said that its distribution network in the world’s second-largest economy had high levels of inventory.
Pernod Ricard and Diageo Plc, Remy’s larger rivals, retreated 2.6 percent to 84.33 euros and 1.6 percent to 1,968 pence, respectively.
Banca Monte dei Paschi di Siena SpA slid 5.9 percent to 18.4 euro cents after its board decided to increase a rights offer to 3 billion euros ($4.1 billion). The bank had planned to raise 2.5 billion euros through the share sale, which it intends to complete by the end of of the first quarter of 2014.
Hugo Boss AG slipped 2.1 percent to 97 euros after the German luxury-clothing maker controlled by buyout firm Permira Advisers LLP predicted that it will miss a 2015 target to achieve a 25 percent margin based on earnings before interest, taxes, depreciation and amortization.
Repsol climbed 4.3 percent to 19.24 euros after ministers made a new offer to compensate the oil producer for the 51 percent stake in YPF seized by Argentina in April 2012. The Spanish oil company in June rejected an offer of assets valued by Argentina at $3.5 billion plus a further $1.5 billion to develop the project, according to a regulatory filing. Repsol’s board will consider the proposal tomorrow.
Algeta ASA surged 30 percent to 345.20 kroner after the Oslo-based drugmaker said it has received a preliminary acquisition proposal from Bayer AG for 336 kroner ($55.05) a share. Algeta said in a statement that the German company’s proposal does not guarantee a deal will take place. Bayer slipped 0.3 percent to 95.77 euros.
In the U.S., the S&P Case-Shiller index of property prices in 20 cities rose 13.3 percent in September, more than the 13 percent forecast by economists surveyed by Bloomberg. The gauge of house values increased 12.8 percent in August.
A separate report showed that confidence among U.S. consumers unexpectedly declined this month. The Conference Board’s index fell to 70.4 in November from a revised 72.4 in October, the New York-based private research group said. The median forecast in a Bloomberg survey of economists had called for a reading of 72.6.