European stocks dropped for a third week in four as the IMF and the World Bank lowered economic growth forecasts and companies predicted their earnings will miss estimates.
Morgan Crucible Co and Cookson Group PLC tumbled at least 14 percent after saying their full-year performance will fall short of targets. Semiconductor makers retreated as the US’ Advanced Micro Devices Inc cut its sales forecast. Marine Harvest ASA lost 5.2 percent after warning that profit will miss analyst estimates.
The STOXX Europe 600 Index declined 1.7 percent to 269.43 this week, after gaining 2.1 percent the previous week. The gauge has still climbed 15 percent from this year’s low on June 4, bolstered by bond-purchasing programs from the European Central Bank and the US Federal Reserve.
“You need to see the data improve, the macro data to improve and the situation in Europe to improve before the market can move further,” UBS AG strategist Nick Nelson said on Bloomberg Television in London. “You have to get the fundamentals improving now, it can’t just be liquidity.”
The IMF cut its global growth estimate to 3.3 percent this year, the slowest since 2009, and reduced its estimate for the next year to 3.6 percent. That compares with July predictions of 3.5 percent this year and 3.9 percent next year.
The World Bank reduced its growth forecast for East Asia, which excludes Japan and India, to 7.2 percent this year from 8.3 percent last year. That is the slowest pace since 2001, according to World Bank data, and lower than an estimate in May of 7.6 percent.
Losses in Europe were limited after US reports showed jobless claims fell to the lowest since February 2008 in the week ended on Oct. 6, while consumer confidence unexpectedly climbed this month. The Fed also said in its anecdotal survey, known as the Beige Book, that the US economy was expanding “modestly” last month.
National benchmark indexes fell in all of the 18 Western European markets this week. Germany’s DAX slid 2.2 percent, the UK’s FTSE 100 lost 1.3 percent, France’s CAC 40 retreated 2 percent. Spain’s IBEX 35 declined 3.8 percent as Standard & Poor’s downgraded the country’s debt to one level above junk.
Cookson Group, a British supplier of materials to the steel and glass industry, plunged 14 percent after predicting that its annual performance will be “materially” below its target.
A gauge of European technology companies retreated 2.8 percent after AMD, the second-largest maker of processors for personal computers, said third-quarter revenue will slide about 10 percent from the prior period, more than the decline of about 1 percent it had previously projected.