Global Stocks Fall

Stocks dropped in the U.S., Europe and Asia, sending the MSCI World Index to its first retreat in seven days, as record declines in European and Chinese manufacturing signaled the global economic slump is worsening.

ArcelorMittal, the world’s biggest steelmaker, decreased 6.8 percent. Barclays Plc, the U.K.’s second-largest bank, slipped 4.8 percent as an industry report showed U.K. house prices sank to the lowest level since January 2006. Mitsubishi Estate Co., Japan’s second-biggest property developer, lost 5.6 percent after the failure of homebuilder Morimoto Co. General Electric Co., the world’s biggest maker of power plant turbines, fell 5.5 percent.

The MSCI World declined 3.9 percent to 857.72 at 2:49 p.m. in London. The benchmark index for 23 developed markets had its biggest advance on record last week as investors speculated stimulus packages and interest-rate cuts in Europe, the U.S. and China will help shore up the economy and stabilize markets.

The Standard & Poor’s 500 Index dropped 4.2 percent before a report that may show U.S. manufacturing contracted at the fastest pace in 26 years. Europe’s Dow Jones Stoxx 600 Index lost 4.3 percent today and the MSCI Asia Pacific Index slipped 0.1 percent.

Russia’s Micex index retreated 5.1 percent. The nation’s manufacturing shrank more in November than during the 1998 financial collapse as output and new orders fell to record lows and companies cut jobs, VTB Bank Europe said today.

National benchmark indexes decreased in all the 18 western European markets. The FTSE 100 dropped 3.4 percent as BP Plc declined with oil prices. Germany’s DAX lost 4.2 percent after ThyssenKrupp AG dropped for the first time in seven days. France’s CAC 40 slipped 3.9 percent.

Japan stocks declined on concern bad- loan costs and job losses will mount after the failure of homebuilder Morimoto Co. drove bankruptcies by listed companies to a postwar record. The Nikkei 225 Stock Average slumped 115.05, or 1.4 percent, to close at 8,397.22 in Tokyo, retreating from the gauge's biggest weekly gain in a month.

Australian stocks fell as the deteriorating global economy weighed on corporate profit growth and commodity prices. The S&P/ASX 200 Index lost 1.6 percent to 3,681.20 at the close of trading in Sydney.

China's stocks rose, as a government plan to increase consumer spending overshadowed reports that manufacturing contracted by a record last month. The CSI 300 Index rose 34.28, or 1.9 percent, to 1,864.20 at the close.,
12/1/2008 6:57:01 AM