European stocks fell, trimming their fourth straight weekly advance, as a surge in US unemployment to a 25-year high damped optimism that the worst of the global recession is over.
Credit Suisse Group AG and Deutsche Bank AG slid more than 1.8 percent as a report showed employers in America cut 663,000 jobs last month.
Novo Nordisk AS tumbled 14 percent after the drugmaker’s experimental diabetes shot received a split recommendation from a US advisory panel. Renault SA and Daimler AG led automakers higher as Credit Suisse upgraded the industry to “overweight.”
“We have a very awful, deep recession,” Jan Loeys, JPMorgan Chase & Co’s global head of market strategy, said in a Bloomberg Television interview in London.
“At some point we will be turning around, but the question is: Is it this year or next year?” Loeys said.
The Dow Jones STOXX 600 Index slid 1 percent to 186.17. The measure posted its fourth week of gains, the longest streak since the global bear market that wiped out US$37 trillion of equity value began in October 2007.
The benchmark index for European stocks has climbed 18 percent since March 9 as the biggest US banks said they made money in the first two months of this year and US Treasury Secretary Timothy Geithner unveiled plans to finance as much as US$1 trillion in purchases of banks’ distressed assets.
National benchmark indexes retreated in 14 of the 18 western European markets. France’s CAC 40 lost 1.1 percent and Germany’s DAX added 0.1 percent. The UK’s FTSE 100 sank 2.3 percent as Tesco PLC retreated.
Financial shares rallied this week as the US Financial Accounting Standards Board agreed to relax fair-value, or mark-to-market, accounting that requires banks to revalue assets each quarter to reflect market prices. Writedowns and credit-related losses at financial institutions have swelled to US$1.29 trillion since the start of 2007.
“You still want to be quite cautious,” said Paul Kavanagh, a partner at Killik & Co in London, which has about US$2.9 billion in assets under management.
“It’s far too early to start thinking about a recovery in the economy,” he said.