European stocks and U.S. futures declined after ING Groep NV and Bulgari SpA reported disappointing earnings and the Bank of England said the U.K. economy faces a “slow” recovery. ING and Bulgari slid more than 5 percent after posting quarterly losses. Unilever, the world’s second-biggest maker of food and detergents, and Novartis AG added more than 3 percent as Credit Suisse Group AG advised clients to switch into so- called defensive stocks. Europe’s Dow Jones Stoxx 600 Index slid 1 percent at 11:48 a.m. in London, having swung between gains and losses at least nine times. The regional benchmark has added 31 percent since March 9 as profits at companies from Credit Suisse Group AG to BASF SE beat projections. “The weak economic backdrop remains,” said Julian Chillingworth, the London-based chief investment officer at Rathbone Unit Trust Management, where he helps oversee about $15 billion. “Markets have performed exceptionally well from the lows. We may have gone too far, too soon.” The Bank of England said the U.K. economy faces a “slow” recovery and inflation will probably stay below its target for the next three years as the country struggles to escape the worst recession since the 1980s. ‘Protracted Recovery’ “The risks are weighted toward a relatively slow and protracted recovery,” Governor Mervyn King said in London today. There are “pretty solid reasons” to question whether a recovery can be sustained and “inflation is more likely to be below the target than above.” European industrial production declined the most on record in March as the worst recession in more than half a century forced manufacturers to cut output. Standard & Poor’s 500 Index futures slipped 0.5 percent. Former Comptroller General David Walker wrote in the Financial Times that the U.S. AAA debt rating may be cut because the government cannot control spending. Credit Suisse recommended investors reduce holdings of automakers, technology companies and steelmakers. Valuations of cyclical stocks “look very stretched,” a team of strategists led by Andrew Garthwaite wrote in a report to clients today. ING, the largest Dutch financial-services company, fell 5.5 percent to 7.372 euros after posting a third consecutive loss. The first-quarter net loss was 793 million euros ($1.1 billion), wider than the 524 million-euro median loss estimate of 10 analysts surveyed by Bloomberg News. Bulgari Drops Bulgari declined 5.4 percent to 3.925 euros as slumping sales of Assioma watches and Allegra jewelry led to its first quarterly loss in 10 years. The first-quarter loss of 29.3 million euros exceeded the 7 million-euro median loss estimate from five analysts surveyed by Bloomberg. Land Securities Group Plc, the U.K.’s largest real estate investment trust by market value, fell 10 percent to 485 pence as it reported a record annual loss as the company’s shopping centers and offices slumped in value. More than half of profits at 270 companies in the Stoxx 600 that have reported results since April 7 beat analysts’ estimates, Bloomberg data show. Profits fell 41 percent on average during the period, according to the data. Novartis, the Basel, Switzerland-based drugmaker, climbed 4.1 percent to 44.66 Swiss francs. Unilever gained 4.2 percent to 1,533 pence after Nomura Holdings Inc. joined Sanford C. Bernstein & Co. in raising its recommendation on the stock. Dexia Climbs Dexia SA surged 3.4 percent to 4.363 euros after the world’s largest lender to local governments reported a smaller- than-estimated drop in first-quarter profit. Net income fell to 251 million euros ($343 million) from 289 million euros a year earlier. That compares with the 88 million-euro median estimate of seven analysts surveyed by Bloomberg News. Compass Group Plc gained 8.6 percent to 361.5 pence. The world’s biggest catering company reported a 33 percent rise in first-half profit. K+S climbed 3.1 percent to 49.96 euros as first-quarter net income rose 27 percent to 107.3 million euros, beating the 70.8 million-euro estimate from a Bloomberg survey of analysts. Europe’s largest producer of potash used in fertilizers said demand for crop nutrients will “normalize” in the second half as customers replenish depleted inventories. The MSCI Asia Pacific Index advanced 0.4 percent as Olympus Corp. unexpectedly forecast a return to profit this year. Olympus jumped 13 percent to 1,943 yen. The digital-camera maker forecast net income of 40 billion yen ($416 million) for the year ending March 2010. Analysts expected a net loss of 9.3 billion yen, based on estimates compiled by Bloomberg.

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