European Stocks Sink to Lowest in 11 Months on Weaker U.S. Growth Outlook - Bloomberg

European stocks tumbled to the lowest level in 11 months amid concern that a slowdown in the world’s largest economy may derail global growth.

Auto-industry shares led the selloff as Fiat SpA (F) and PSA Peugeot Citroen lost more than 4 percent. Pandora A/S tumbled 65 percent as the Danish jewelry maker posted earnings that missed estimates. Metro AG (MEO) slid 7.5 percent as Germany’s biggest retailer said profit dropped. Wacker Chemie AG (WCH), the second- largest producer of solar-grade silicon, plunged 10 percent.

The Stoxx Europe 600 Index retreated 1.9 percent to 256.98 at the 4:30 p.m. close in London, the lowest level since Aug. 31. European stocks yesterday were the first major region to enter a so-called correction, with the Stoxx 600 dropping 10 percent from this year’s highest level, as falling Spanish and Italian bonds showed the sovereign-debt crisis is spreading.

“There’s a vicious circle between markets and the economy, with poor economic data refueling negative sentiment,” Philippe Gijsels, head of research at BNP Paribas (BNP) Fortis Global Markets, said in a phone interview from Brussels. “There are enough elements on the table to create a nervous environment.”

National benchmark indexes fell in all 18 western European markets today. The U.K.’s FTSE 100 lost 1 percent, Germany’s DAX declined 2.3 percent and France’s CAC slid 1.8 percent. The Swiss Market Index (SMI) tumbled 4.1 percent after reopening following yesterday’s holiday as UBS AG (UBSN) and Credit Suisse Group AG (CSGN) sank more than 7 percent.

U.S. Economy

Stocks extended losses as U.S. Commerce Department figures showed consumer purchases fell 0.2 percent in June, the first drop in almost two years. The median estimate of 77 economists surveyed by Bloomberg called for a 0.1 percent increase. Read More