European stocks tallied their biggest weekly loss in more than a month after Heineken NV and Unilever cut their sales and profit forecasts, sparking concern that a rally that sent benchmark indexes to their best quarters in more than three years may end.
The Dow Jones Stoxx 50 Index slipped 0.2 percent to 2426.84 at 7:40pm in London, for a weekly slide of 2 percent. The Stoxx 600 added 0.1 percent, trimming its decline in the five days to 1.8 percent.
Both indexes have climbed 16 percent since the end of March, on track for their biggest gains since the fourth quarter of 1999, as the end to the Iraq war boosted optimism that corporate profits were set to recover. The forecasts from Unilever and Heineken prompted some investors to question whether the 3 1/2 month rally will continue.
"There is concern companies will give some profit warnings before releasing quarterly results," said Mirko Faroni, who helps manage the equivalent of US$11 billion at Capitalgest SpA in Brescia, Italy. "Investors are waiting for figures to show that recent gains in the market are justified by prospects for growth in the economy."
The Stoxx indexes had advanced in three of the past four weeks amid optimism that economic growth will accelerate in the US, Europe's biggest export market.
Benchmark indexes rose in 13 of the 17 Western European markets. The UK's FTSE 100 Index gained 0.7 percent, France's CAC 40 Index added 0.2 percent and Germany's DAX Index slipped 0.5 percent.
September futures on the Euro Stoxx 50 Index of companies based in the 12 countries sharing the euro fell 21 to 2438. The index was little changed at 2453.49.
Heineken, the world's third-largest brewer, lost 0.7 percent to 31.18 euros, for an 8.5 percent drop this week. On Monday, the stock had its biggest decline in almost 14 years after the company said profit growth stalled in the first half as French, Dutch and US customers cut back on beer drinking.
Unilever, whose biggest brands include Knorr soup, Dove soap and Hellmann's mayonnaise, rose 0.5 percent in Amsterdam to 47.34 euros, paring its slump since last Friday to 11 percent. The Anglo-Dutch company, the world's biggest maker of food and soap, on Monday cut the sales forecast for its 400 leading brands to 4 percent from as much as 6 percent.
Total SA today led declines in energy stocks, falling 1.1 percent to 133.6 euros and 3 percent in the week. Suez SA sold all 3.7 million shares it held in the French company, Europe's third-biggest oil producer, to raise cash to pay off debt. Suez, the world's second-biggest water company, slipped 0.1 percent to 13.95 euros, slumping 9.7 percent this week.
Elan Corp, the Irish drugmaker whose accounting is being probed by US regulators, lost 5.8 percent to 4.10 euros. The stock slumped 38 percent in the week, the biggest drop in the Stoxx 600. The company said on Thursday that its failure to report last year's results lets creditors demand immediate payment of as much as US$2 billion, putting it at risk of default.
Deutsche Telekom AG, Europe's biggest phone company, was the second-biggest gainer in the Stoxx 50, adding 0.8 percent to 13.50 euros and 3.9 percent since last Friday. On Tuesday, Moody's Investors Service raised its outlook on the company's long-term debt to "positive" from "stable." The ratings company cited its "very significant steps" to cut debt.
RSS