London, May 13 (Bloomberg) -- U.S. stocks fell in Europe amid concern a rally that lifted the Standard & Poor's 500 Index to its highest since August isn't justified by the outlook for corporate profits and the economy. Home Depot Inc. led declines among Dow Jones Industrial Average stocks. Retail sales slowed in April and industrial production decreased for a third month as economic growth showed few signs of accelerating, economists expect reports this week to show. Wal- Mart Stores Inc. and Deere & Co. are among companies reporting earnings today. June S&P 500 Index futures lost 2.7 to 941.5 as of 10:30 a.m. in London. Dow futures slid 23 to 8672 and Nasdaq-100 Index futures dropped 2 to 1158.
``I worry the market is becoming too optimistic,'' said Mike Bayer, who manages $216 million of assets at Ceros Vermoegensverwaltung in Frankfurt. ``Earnings have been pretty positive, but when indexes start trading where they are I have a problem.'' Bayer said he isn't buying shares because ``all it will take is two or three pieces of bad news'' for stocks to fall. Home Depot, the world's biggest home-improvement retailer, slid 40 cents to $30.08 in Germany. The S&P 500 yesterday climbed 1.3 percent to 945.11, its highest level since August. The benchmark on Friday competed its fourth straight week of gains, the longest rally in more than half a year. Some investors said concerns about a stagnating economic recovery and slowing consumer and corporate spending may limit further gains. QLT Inc. tumbled 12 percent to $11.40 in Germany today after the maker of the eye treatment Visudyne said it won't resume studies of a lung-cancer drug because of safety concerns. News Corp. and J.C. Penney Co. are also set to release earnings today. Applied Materials Inc. reports after the close of regular trading.//www.bloomberg.com