Stocks in Europe and Asia retreated, extending the MSCI World Index worst start to a year, as the deepening recession eroded earnings and pushed German business confidence to a 26-year low. U.S. futures rose after the Standard & Poor’s 500 Index closed at the lowest level since 1997. TomTom NV, Europe’s largest maker of car-navigation devices, tumbled for a ninth day after reporting a fourth-quarter loss. Novartis AG, Switzerland’s second-biggest drugmaker, dropped 2.5 percent as Chief Executive Officer Daniel Vasella said pressure on drug prices and patents will grow this year. Nomura Holdings Inc., Japan’s largest brokerage, slumped 9.3 percent on its plan to sell shares after four quarterly losses. The MSCI World slid 0.5 percent to 753.35 at 11:41 a.m. in London, falling for an 11th day, the longest stretch since 2005. The gauge of 23 developed countries retreated 18 percent in 2009 as companies from Anglo American Plc to Cie. de Saint-Gobain SA indicated the recession is worsening. This year’s drop is more than double the slump at the same point in 2008. “This is turning out to be one of the worst bear markets in the past 100 years,” Bob Parker, who helps oversee $600 billion as vice chairman of Credit Suisse Asset Management, said in a Bloomberg Television interview in London. “The question we have to ask is: what are the catalysts for creating a base and what are the catalysts for an eventual rally.” Cheapest Since 1985 U.S. futures rebounded after the Standard & Poor’s 500 Index sank 3.5 percent yesterday, leaving the index valued at its cheapest relative to earnings since 1985. Futures on the S&P 500 added 0.8 percent today as Home Depot Inc. reported profit that beat analysts’ estimates. Europe’s Dow Jones Stoxx 600 Index slid for a third day, losing 1.5 percent as Basilea Pharmaceutica AG tumbled. The MSCI Asia Pacific Index fell 1.8 percent to 74.92, the lowest since August 2003. The MSCI World has retreated 53 percent since the start of last year as credit-related losses at financial firms worldwide climbed to $1.1 trillion and Europe, the U.S. and Japan fell into the first simultaneous recessions since World War II. German business confidence declined to a 26-year low in February as the worst recession since World War II prompted companies to curb production and lay off workers. The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, fell to 82.6 from 83 in January. Confidence among U.S. consumers probably dropped in February to the lowest level on record, signaling spending will slump further as unemployment climbs, economists said before a report today. Separate data may show the decline in home values accelerated in December. TomTom Retreats TomTom slid 4 percent to 3.13 euros after reporting a loss on a writedown of the value of its mapmaking unit Tele Atlas. The company’s room in its loan covenants is “not tremendously big,” Chief Executive Officer Harold Goddijn said in a telephone interview today. Novartis slipped 2.5 percent to 46.72 Swiss francs. Budget restrictions because of the global financial crisis and an aging population will lead governments and payers to put strains on drug prices and patents, CEO Vasella said today at the company’s annual shareholder meeting in Basel, Switzerland. Basilea Pharmaceutica fell 36 percent to 70.95 francs, the biggest drop in the Stoxx 600. The Swiss developer of anti- infection drugs reported a full-year loss and said its Ceftobiprole drug used to treat skin infections is being delayed in Europe. Georg Fischer Drops Georg Fischer AG sank 6.8 percent to 150 francs. Europe’s largest maker of iron castings for cars said full-year profit fell 72 percent to 69 million francs ($59 million) as demand from the automotive industry collapsed. Profits have declined 82 percent for 174 companies in the Stoxx 600 that released results since Jan. 12, data compiled by Bloomberg show. “There’s discouragement about the market,” Chicuong Dang, an analyst at KBL Richelieu Gestion in Paris, which oversees $5.1 billion in assets, said in a Bloomberg Television interview. “Bad earnings results are weighing on sentiment, which is clearly low.” Nomura slumped 9.3 percent to 420 yen. The company will sell shares valued at as much as 291.2 billion yen ($3.1 billion) to replenish capital eroded by four-straight quarterly losses, according to filings to the Ministry of Finance yesterday. Bayerische Motoren Werke AG retreated 6.8 percent to 18.78 euros. The world’s largest maker of luxury cars was cut to “underweight” from “overweight” at Morgan Stanley, which said sales may fall by one-third by 2010. Norsk Hydro Norsk Hydro ASA dropped 4.2 percent to 21.9 kroner. The world’s fifth-largest aluminum producer was cut to “underweight” from “overweight” at JPMorgan, which said demand for the metal “remains weak and prices are under pressure.” KBC Group NV slid 7.5 percent to 8.14 euros. Belgium’s biggest bank and insurer by market value was cut by Deutsche Bank AG to “sell” from “hold.” Vestas Wind Systems A/S slipped 4.8 percent to 267.50 kroner. Shares of the largest wind-turbine maker were cut to “underweight” from “neutral” at JPMorgan, which cited “risks to near-term and long-term industry profitability.” Home Depot, the world’s largest home-improvement retailer, gained 2.9 percent to $19.26 in Germany. The company reported profit excluding items was 19 cents, compared with the consensus estimate of 15 cents. JPMorgan Chase & Co. advanced 5 percent to $20.48 in Germany. The second-largest U.S. bank cut its dividend by 87 percent, aiming to protect the bank even if the economy deteriorates “significantly.” President Barack Obama is gambling he can dispel the cloud of uncertainty that has driven bank shares to a two-decade low by subjecting lenders to rigorous reviews and reviving the market for their toxic assets. Officials will begin so-called stress tests of about 20 of the nation’s largest banks tomorrow with the aim of ensuring they have sufficient capital to withstand the toughest of economic times.

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