Wednesday, 4 July 2012

European Stocks Drop From Two-Month High As Banks Decline

BLOOMBERG NEWS By Jonathan Morgan - Jul 4, 2012 11:30 AM GMT+0400

European stocks declined, dragging the benchmark Stoxx Europe 600 Index from the highest level in two months, as banks and utilities retreated. U.S. index futures fluctuated, while Asian shares advanced.
Standard Chartered Plc (STAN) and UBS AG (UBSN) led banking shares lower. Chr. Hansen A/S, the maker of natural food colors and cheese cultures, climbed 8.3 percent in Copenhagen after reporting earnings that exceeded estimates.
A visitor passes a red stock index curve displayed on an electronic screen at the Hellenic stock exchange in Athens. Photographer: Chris Ratcliffe/Bloomberg
The Stoxx 600 slipped 0.2 percent to 256.83 at 8:30 a.m. inLondon, after rallying 5.2 percent over the previous three days. The index is still on course for a fifth straight week of gains, the longest stretch since January, as European leaders agreed to address flaws in their bailout programs to ease the sovereign- debt crisis.
“There will be thin trading today as U.S. stocks are closed forIndependence Day with no major economic releases due out,” said Nam Truong, a trader at Capital Spreads in London.
Futures on the Standard & Poor’s 500 Index expiring in September declined 0.1 percent, while the MSCI Asia Pacific Index added 0.4 percent. U.S. equity markets are closed for the Independence Day holiday today.
A report today may show euro-area retail sales were unchanged in May from the prior month, when then dropped 1 percent, according to the median estimates in a Bloomberg survey of economists.
The European Central Bank and the Bank of England will announce interest-rate decisions tomorrow. ECB officials will lower their benchmark rate by 25 basis points to a record low 0.75 percent, according to the median forecast in a Bloomberg survey of 62 economists. Five predict a cut of 50 basis points and 11 foresee no change.
To contact the reporter on this story: Jonathan Morgan in Frankfurt
To contact the editor responsible for this story: Andrew Rummer at