European stocks fell, paced by airlines and carmakers including Air France SA and Volkswagen AG, as oil rose to a record in New York, stoking concern high energy prices may curb economic and corporate earnings growth. Technology-related stocks including Nokia Oyj and chip- equipment maker ASML Holding NV, whose earnings are among the most dependent on economic growth, led declines after a report on manufacturing in the U.S., Europe's largest export market, showed orders are slowing. ``Stock markets will continue to fall because higher oil prices will have an effect on company profits,'' said Emiel van den Heiligenberg, who oversees the equivalent of $97 billion at Fortis Investments in Amsterdam. ``We expect even higher oil prices and we see economic growth fading.'' He said his company has reduced holdings of equities.
The Dow Jones Stoxx 50 declined 0.5 percent to 2560.71 as of 12:24 p.m. in London. The Stoxx 600 shed 0.5 percent, with all 18 industry groups falling. The Euro Stoxx 50, a benchmark for the 12 countries using the euro, also slipped 0.8 percent, with almost ten stocks falling for each one that gained. The Stoxx 50 has declined in seven of the past eight weeks on speculation higher energy prices will damp consumer spending and boost companies' costs. A 10 percent rise in oil prices erodes 8 percent from the performance of European equities indexes, Goldman, Sachs & Co. estimates. The Stoxx 50 is heading for a weekly gain of 0.9 percent. The Stoxx 600 has advanced 0.3 percent and the Euro Stoxx 50 has gained 1.6 percent in the period. All of the 18 national benchmark indexes open in Western Europe fell, except for Luxembourg. France's CAC 40 Index shed 0.6 percent. Germany's DAX Index slipped 0.7 percent and the U.K.'s FTSE 100 Index lost 0.2 percent. September futures on the Euro Stoxx 50 decreased 0.5 percent.
Airlines and Carmakers
Airlines and carmakers were among the biggest decliners. Air France, Europe's largest airline, shed 1.9 percent to 12.38 euros. Volkswagen AG, Europe's largest automaker, dropped 1.3 percent to 30.59 euros. Crude-oil futures rose to a record $49 a barrel in New York and $44.80 in London. Prices will probably extend gains next week, according to 63 percent of respondents in a Bloomberg survey of 51 traders and analysts.
Nokia, ASML
Technology companies, whose earnings are more dependent on economic growth than most, declined. Nokia, the world's largest maker of phone handsets, shed 1.7 percent to 9.46 euros. ASML, Europe's biggest maker of semiconductor equipment, fell 1.9 percent to 10.93 euros. A survey by the Philadelphia branch of the U.S. Federal Reserve yesterday showed its index of manufacturing activity declined more than expected to 28.5 in August from 36.1 the previous month. A reading of 30 was predicted, according to the average estimate of 52 economists polled by Bloomberg. The report came yesterday after the close of markets in Europe. WPP Group Plc, the world's second-largest advertising and marketing company, dropped 2.3 percent to 483 pence even after saying first-half profit rose 11 percent. WPP reiterated that ``concerns remain'' about the prospects for the U.S. economy after the presidential election in November.
Publicis, TUI
Publicis Groupe SA, the world's fourth-biggest advertising company, rose 2.5 percent to 22.30 euros after being picked to enter France's benchmark CAC 40 stock index from Sept. 30. Stocks that enter an index can attract buyers among fund managers that track the benchmark. Publicis will replace Aventis SA, which is merging with rival drugmaker Sanofi-Synthelabo SA. Essilor International SA, the world's biggest maker of eyeglass lenses, declined 2.4 percent to 50.25 euros. Some analysts had said the stock was another candidate to enter the CAC 40. TUI AG, Europe's biggest travel operator, dropped 3.6 percent to 14.78 euros after WestLB AG said it plans to sell its entire 31.3 percent stake in the company. WestLB, Germany's No. 3 state-owned bank, wants to sell its stake as a whole ``if possible.''
Philips, Laurus
Royal Philips Electronics NV, part owner of the world's No. 2 maker of liquid-crystal displays, fell 0.8 percent to 18.51 euros. Global supply of such screens used in computers and televisions exceeded demand in the first half and the glut will widen as eight new plants come on line this year, California-based Isuppli Corp. researcher said in a quarterly report. Laurus NV tumbled 7 percent to 80 euro cents. The second- biggest Dutch grocery-store operator said it lost an estimated 15 million euros ($18.5 million) in the first half, compared with a year-earlier profit of 7 million euros. Coloplast A/S, Europe's largest maker of colostomy products, slid 1.2 percent to 598 Danish kroner, after its fiscal third-quarter profit lagged analysts' estimates. Net income rose 2.7 percent to 153 million kroner ($25.5 million). Analysts polled by SME Direkt had estimated net income of 161 million kroner. ///www.bloomberg.com