European stocks slumped as oil rose to a record in New York and the dollar slid against the euro, heightening concern that corporate profit growth may slow. The Dow Jones Stoxx 50 is set for its biggest drop in more than two months. DaimlerChrysler AG and Ericsson AB declined. ``Oil prices at these levels will hurt growth, and the dollar falling is not good news for dollar-earners,'' said Stuart Fraser, a director at Brewin Dolphin Holdings Plc in London, which has about $26 billion in assets. ``This won't change in the short term.''
The Stoxx 50 slipped 1.7 percent to 2643.45 at 9:35 a.m. in London, heading for its steepest decline since Aug. 6 and its lowest level since Sept. 2. The Stoxx 600 lost 1.5 percent, while the Euro Stoxx 50 benchmark for the 12 countries using the euro declined 1.7 percent. Concern that record energy costs will curb demand and economic growth has helped pare 4 percent from the Stoxx 50 since the benchmark's Oct. 5 peak for the quarter. Profits for European companies, which rely on the U.S. for a fifth of their sales, may be further eroded as the dollar trades at an eight-month low. London and New York oil futures climbed to a record on concern offshore oil output from Norway, the world's third- biggest exporter, may be halted by a labor dispute. New York-traded crude for December delivery rose as high as $55.67 as of 9:15 a.m. London time, the highest intraday price since the futures began trading in 1983. New York oil prices have added 70 percent this year. Brent crude rose as much as 1.3 percent to $51.90 a barrel today in London. The Stoxx 600's groupings of technology and car shares were the two worst performers among 18 industries.
Benchmarks Slump
Benchmark indexes fell in all 16 Western European markets open. Germany's DAX Index slipped 2.4 percent. France's CAC 40 Index lost 2.3 percent and the U.K.'s FTSE 100 Index decreased 1.3 percent. Italy's exchange remained closed for ``technical reasons,'' the bourse's operator said. Iceland's market opens at 11 a.m. London time. December futures on the Euro Stoxx 50 fell 1.9 percent. DaimlerChrysler, the maker of Mercedes-Benz vehicles, and Porsche AG, designer of the Boxster sports car, dropped as the dollar's slide eroded the value of auto sales in the world's largest economy. The dollar has shed 3.5 percent in the nine days since Oct. 12, the longest losing streak since Dec. 27, 2000. The currency fell to $1.2757 per euro after the increase in oil prices spurred concern the U.S. economy will slow. DaimlerChrysler shed 2.5 percent to 31.97 euros. It got almost half of its sales from the U.S. last year. Porsche lost 3.3 percent to 490.99 euros. The U.S. is its largest national market.
Ericsson, Allianz
Ericsson dropped 3.9 percent to 20 kronor. The biggest maker of mobile-phone networks extended Friday's 7.6 percent drop after Morgan Stanley and Lehman Brothers Holdings Inc. cut their recommendations on the shares. Morgan Stanley reduced its rating on Ericsson, which last week reported orders slowed, to ``underweight'' from ``equal- weight.'' Lehman Brothers cut the stock to ``equal weight'' from ``overweight.'' Nokia Oyj, the biggest mobile-handset maker, dropped 2 percent to 11.64 euros. Allianz AG, Europe's biggest insurer, lost 2.3 percent to 78.55 euros. Axa SA, the region's No. 2 insurance company, shed 2.6 percent to 16.15 euros. Citigroup Inc. cut its recommendation on the European insurance industry to ``neutral'' from ``outperform,'' saying a probe by New York Attorney General Eliot Spitzer into the U.S. industry may increase risks for the stocks.
BBVA, Warner Chilcott
Banco Bilbao Vizcaya Argentaria SA, Spain's second-biggest lender, declined even after the bank increased third-quarter profit 23 percent, helped by acquisitions and consumer banking earnings. Net income was 704 million euros ($899 million), topping the 674 million-euro median of seven analyst estimates. BBVA shares lost 1.7 percent to 11.76 euros. The stock had gained 8 percent this month before the earnings report. Warner Chilcott Plc rose 1.8 percent to 833 pence. Northern Ireland's largest drugmaker said it's talking with an unidentified bidder that offered about 1.56 billion pounds ($2.9 billion) for the company. Warner Chilcott said the bidder offered 837 pence an ordinary share, subject to several conditions. The shares closed at 818.5 pence last week. Manchester United Plc slipped 2.4 percent to 277 pence. The world's biggest soccer club by revenue said it ended talks with Malcolm Glazer about a takeover offer because the U.S. billionaire's proposal involves borrowing against the company's assets. ///www.bloomberg.com