EU stocks fall on dis­agree­ment over Greece

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BRUSSELS

Euro­pean stocks fell for a fifth day af­ter euro-area fi­nance min­is­ters and the In­ter­na­tional Mone­tary Fund failed to agree on how Greece will re­pay its debt. U.S. in­dex fu­tures and Asian shares also dropped.

EON AG slumped 9.8 per­cent af­ter Ger­many's big­gest util­ity low­ered its earn­ings fore­cast for 2013. Voda­fone Group Plc (VOD) slid 3.5 per­cent af­ter the world's sec­ond-largest mo­bile-phone com­pany took a 5.9 bil­lion-pound ($9.4 bil­lion) write­down for its op­er­a­tions in Spain and Italy. Pirelli & C SpA de­clined 3.5 per­cent af­ter the tire­maker cut its 2012 rev­enue tar­get and raised its debt fore­cast.

EON AG slumped 6.9 per­cent af­ter Ger­many's big­gest util­ity low­ered its earn­ings fore­cast for 2013. Pho­tog­ra­pher: Ti­mothy Fadek/Bloomberg

The Stoxx Europe 600 In­dex dropped 0.5 per­cent to 268.12 at 8:41 a.m. in Lon­don, its long­est los­ing streak since May. The eq­uity bench­mark has re­treated 2.4 per­cent since Pres­i­dent Barack Obama won re-elec­tion as con­cern grew that im­pend­ing U.S. tax in­creases and spend­ing cuts, known as the fis­cal cliff, will harm the world's big­gest econ­omy.

"The ex­is­ten­tial threat to the euro zone per­sists in the short term and is a rea­son to be cau­tious," said Abi Oladimeji, head of in­vest­ment strat­egy at Thomas Miller In­vest­ment Ltd. in Lon­don, who ad­vised re­duc­ing hold­ings in eq­ui­ties. "Both the euro-zone cri­sis and the fis­cal cliff are down­side risks to the fi­nan­cial and eco­nomic out­look," he said in a phone in­ter­view.

The Euro Stoxx 50 In­dex, a bench­mark for the euro re­gion, slipped 0.8 per­cent to 2,454.16 to­day. Stan­dard & Poor's 500 In­dex fu­tures ex­pir­ing in De­cem­ber slid 0.7 per­cent, while the MSCI Asia Pa­cific In­dex lost 0.6 per­cent.

Euro-area fi­nance min­is­ters gave Greece an ex­tra two years to cut its bud­get deficit to 2 per­cent of gross do­mes­tic prod­uct, pledg­ing to plug the re­sult­ing fi­nanc­ing gap to pre­vent the coun­try from leav­ing the sin­gle cur­rency.

Fi­nance min­is­ters put off un­til Nov. 20 a de­ci­sion on how to cover ad­di­tional Greek needs of as much as 32.6 bil­lion eu­ros ($41 bil­lion) and left un­clear whether the In­ter­na­tional Mone­tary Fund will continue to con­trib­ute. IMF Manag­ing Di­rec­tor Chris­tine La­garde dis­agreed with a de­ci­sion by the rep­re­sen­ta­tives of the 17-na­tion cur­rency zone to post­pone the goal of get­ting Greece's debt down to 120 per­cent of GDP by two years, un­til 2022.

"Euro­pean fi­nance min­is­ters now have to grap­ple with two par­tic­u­larly thorny ques­tions: how to fi­nance Greece for the next four years and how to en­sure that Greece's bur­geon­ing debt burden is sus­tain­able?" James Nixon, an econ­o­mist at So­ci­ete Gen­erale SA in Lon­don, wrote in a re­port to­day. "Given the po­lit­i­cal re­luc­tance to grant Greece any more lee­way, a res­o­lu­tion to these ques­tions still looks chal­leng­ing."

A re­port from the ZEW Cen­ter for Euro­pean Eco­nomic Re­search at 11 a.m. in Mannheim, Ger­many, will show that a mea­sure of in­vestor con­fi­dence in Europe's big­gest econ­omy climbed this month, ac­cord­ing to a sur­vey of economists.

EON slumped 9.8 per­cent to 14.93 eu­ros af­ter say­ing yes­ter­day its fore­cast of 3.2 bil­lion eu­ros to 3.7 bil­lion eu­ros of un­der­ly­ing net in­come next year "no longer seems achiev­able" be­cause gas-fired power plants aren't mak­ing money. The com­pany said it will con­sider cut­ting div­i­dend pay­ments be­cause of the "sub­stan­tial eco­nomic uncer­tain­ties and struc­tural changes in the en­ergy in­dus­try."

The util­ity to­day re­ported profit that more than dou­bled in the first nine months from a year ear­lier.

Voda­fone slid 3.5 per­cent to 160.8 pence as the an­nounce­ment of the im­pair­ment out­weighed its de­ci­sion to start a 1.5 bil­lion-pound buy­back plan. Ver­i­zon Wire­less will pay an $8.5 bil­lion div­i­dend to its coown­ers, Voda­fone and Ver­i­zon Com­mu­ni­ca­tions Inc., by the end of 2012, en­abling Voda­fone to fi­nance the share buy­back.

Pirelli dropped 3.5 per­cent to 8.37 eu­ros. Europe's third­largest tire­maker yes­ter­day low­ered its fore­cast for 2012 rev­enue by 250 mil­lion eu­ros to 6.15 bil­lion eu­ros be­cause of Europe's eco­nomic slow­down. Third-quar­ter profit missed an­a­lysts' es­ti­mates. The com­pany fore­cast debt will rise to more than 1.2 bil­lion eu­ros from a pre­vi­ous tar­get of less than 1.1 bil­lion eu­ros, ac­cord­ing to a state­ment af­ter mar­kets closed. Third- quar­ter net in­come fell 7.3 per­cent to 87 mil­lion eu­ros, miss­ing the av­er­age es­ti­mate of 102.2 mil­lion eu­ros in a Bloomberg sur­vey (PC) of six an­a­lysts.

K+S AG (SDF) sank 5.1 per­cent to 34.08 eu­ros af­ter say­ing earn­ings be­fore in­ter­est and taxes ex­clud­ing some hedg­ing transactions, re­ferred to as Ebit I, will be about 820 mil­lion eu­ros this year, rather than at the up­per end of a range ex­tend­ing to 900 mil­lion eu­ros. Rev­enue will be just over 3.9 bil­lion eu­ros, com­pared with the top-end fig­ure of 4.2 bil­lion eu­ros, the com­pany added.

FLSmidth & Co. A/S tum­bled 5.4 per­cent to 324.70 kro­ner. The Dan­ish maker of min­ing equip­ment re­ported thirdquar­ter net in­come that missed an­a­lysts' es­ti­mates. It also fore­cast an an­nual profit mar­gin be­fore in­ter­est and taxes of 8 per­cent, com­pared with pre­vi­ous guid­ance of as much as 9 per­cent.

Sonova Hold­ing AG (SOON) surged 8.3 per­cent to 100.70 Swiss francs. The Swiss provider of hear­ing prod­ucts re­ported first- half profit that beat an­a­lysts' es­ti­mates as its cochlear- im­plant seg­ment be­came prof­itable and the hear­ing-aid busi­ness ex­panded in the UK and Spain.

ITV Plc ad­vanced 5.7 per­cent to 91.7 pence. The U.K.'s big­gest ter­res­trial com­mer­cial broad­caster said group ex­ter­nal rev­enue rose 4 per­cent in the first nine months of this year. The com­pany also raised a tar­get for cost sav­ings this year.

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