Stocks in Europe and Asia Decline; U.S. Index Futures Retreat

March 12 (Bloomberg) -- Stocks in Europe and Asia fell for the first time in three days and U.S. futures slid as companies from Bayerische Motoren Werke AG to K+S AG posted disappointing results and Japan’s economy shrank the most since 1974.

BMW, the world’s largest maker of luxury cars, tumbled 10 percent after posting full-year net income that trailed analysts’ estimates. K+S, Europe’s biggest producer of potash used in fertilizers, lost 9.7 percent on a forecast for “significantly” lower earnings this year. Mitsubishi UFJ Financial Group Inc. slumped 3.7 percent after Japan’s economy contracted 12.1 percent in the fourth quarter.

The MSCI World Index dropped 0.9 percent to 724.69 at 10:17 a.m. in London, extended its 2009 retreat to 21 percent. The gauge of 23 developed nations had rallied 6.1 percent in the past two days as JPMorgan Chase & Co. and Citigroup Inc. said they were profitable in January and February, bolstering speculation that the worst of the banking crisis may be over.

“The market will remain under pressure until we get some indication of the speed and strength of any economic recovery,” said Henk Potts, a London-based fund manager at Barclays Stockbrokers, which has about $45 billion under management. “We have seen horrendous economic data recently and the outlook for corporate profitability still is under severe pressure, which is a powerful mix of negativity.”

Futures on the Standard & Poor’s 500 Index slid 1 percent before reports on retail sales and jobless claims that may show the U.S. recession is deepening. Steel Dynamics Inc. retreated after cutting its forecast.

Dividend Cuts

The global economy may shrink for the first time since World War II and trade will likely decline the most in 80 years, the World Bank said this month. The MSCI World has fallen 49 percent in the past year as disappointing results at companies from Anglo American Plc to Nissan Motor Co. and dividend cuts by JPMorgan and General Electric Co. sent investors out of equities.

Europe’s Dow Jones Stoxx 600 Index lost 2 percent as Thomas Cook Group Plc fell. The MSCI Asia Pacific Index slipped 1 percent, snapping a two-day, 4.1 percent advance.

The dollar and the yen strengthened on speculation the deepening recession will increase demand for the two currencies as a refuge. The euro fell for the first time in three days against the dollar before a German report that economists say will show industrial production dropped for a fifth month, giving the European Central Bank more room to cut interest rates.

BMW, K+S, Bulgari

BMW tumbled 10 percent to 20.57 euros after reporting full- year net income of 330 million euros ($422 million), missing analysts’ estimates of 1.02 billion euros.

K+S dropped 9.7 percent to 30.72 euros after it forecast “significantly” lower earnings this year on a slump in demand for potash and magnesium products.

Bulgari SpA declined 5.9 percent to 3.02 euros as the world’s third-largest jeweler reported its biggest profit drop in a decade and cut its dividend. Fourth-quarter net income dropped 89 percent to 5.7 million euros ($7.27 million), based on full- year figures reported by the company. That missed the 23.4 million-euro estimate of analysts surveyed by Bloomberg News.

Thomas Cook Group led travel and leisure shares in the Stoxx 600 lower, falling 14 percent to 197.7 pence. Peter Fankhauser, head of Europe’s second-biggest travel company’s German business, said next year will be “more difficult” than 2009.

Earnings for 278 companies in the Stoxx 600 that reported results since Jan. 12 dropped 95 percent, according to Bloomberg data. That compares to a 58 percent contraction for the 472 companies in the S&P 500 that reported during the same period.

Steel Dynamics

Steel Dynamics slid 11 percent to $7.58 in Germany. The fourth-largest U.S.-based steelmaker by market value said it expects to lose at least 40 cents a share in the first quarter. The company had earlier projected profit of as much as 10 cents.

Mitsubishi UFJ slumped 3.7 percent to 396 yen. Mizuho Financial Group Inc., Japan’s second-largest bank, fell 2.8 percent to 171 yen.

Gross domestic product in Japan shrank an annualized 12.1 percent in the three months ended Dec. 31, government figures today showed, as exports, output and business spending collapsed. The figure was less than the 12.7 percent reported last month.

BHP Billiton Ltd. and Antofagasta Plc led losses among raw- material producers as base metals retreated.

BHP Billiton, the world’s largest mining company, slid 3.3 percent to 1,286 pence as copper traded near a one-week low in Asia. Antofagasta slipped 6.7 percent to 499.75 pence as Royal Bank of Scotland Group cut the shares to “sell” from “hold.”

Intesa Sanpaolo SpA, Italy’s biggest bank by market value, slid 3 percent to 1.65 euros as Goldman Sachs Group Inc. lowered its recommendation to “sell” from “neutral.”

Enel, Carrefour

Enel SpA, whose 2007 purchase of Endesa SA made it Europe’s most indebted utility, added 2.8 percent to 3.47 euros. The company posted a 35 percent increase in full-year earnings and said it will sell up to 8 billion euros of new shares to reduce borrowings and protect its investment-grade credit rating.

Carrefour SA added 1.8 percent to 25.11 euros. Europe’s largest retailer said it will step up price cuts and reduce capital spending this year to help revive sales growth and cope with “challenging” business conditions.

Roche Holding AG slipped 1.9 percent to 142.8 Swiss francs after boosting its offer to buy the rest of Genentech Inc., ending a 7 1/2 month takeover battle. The world’s biggest maker of cancer drugs increased its offer to buy the rest of Genentech to $95 a share, valuing the acquisition at $46.8 billion. Genentech climbed 1.4 percent to $93.42 in Germany.

Retail sales in the U.S. probably fell in February for the seventh time in eight months as soaring job losses forced consumers to pull back, economists said before a Commerce Department report at 8:30 a.m. in Washington. Labor Department figures may show more than 600,000 Americans filed claims for unemployment benefits for a sixth straight week, the worst performance since 1982.