By Stephen Kirkland Sept. 16 (Bloomberg) -- Stocks fell for a third day in Europe and U.S. index futures declined as an unexpected drop in U.K. retail sales revived concern the economic recovery is stalling. The yen gained after Japan’s intervention yesterday spurred its biggest slide in 22 months. Gold rose to a record. The Stoxx Europe 600 Index lost 0.5 percent at 7 a.m. in New York, while futures on the Standard & Poor’s 500 Index retreated 0.3 percent. China’s Shanghai Composite Index sank 1.9 percent. The yen strengthened against the dollar and the pound. Gold climbed to a record $1,275.30 an ounce. Oil fell for a third day and tin advanced to a two-year high. Retail sales in the U.K. dropped 0.5 percent from July, the country’s Office for National Statistics said, compared with the 0.3 percent increase forecast by economists in a Bloomberg survey. A report today may show more Americans filed for jobless claims last week for the first time in a month. Japan’s Prime Minister Naoto Kan pledged today to keep taking “decisive measures when necessary” after the government sold yen yesterday to curb gains that are undermining exports. “The global economic recovery continues to disappoint,” Robert Buckland, a London-based equity strategist at Citigroup Inc., wrote in a report today. “Lead indicators are softer and economists are lowering expectations.” More than two shares fell in the Stoxx 600 for every one that gained, while the MSCI Asia Pacific Index lost 0.7 percent. The equity gauge for shares in Shanghai dropped the most in three weeks as Goldman Sachs Group Inc. said China’s plan to impose tougher capital rules on banks will slow loan growth to a pace that more closely matches economic expansion. Marks & Spencer Ericsson AB, the world’s biggest maker of wireless networks, tumbled 2.9 percent as Svenska Handelsbanken Capital Markets trimmed its estimates for the company. Colruyt NV, Belgium’s largest discount food retailer, lost 2.3 percent after forecasting profit that missed analysts’ estimates. Siemens AG advanced 3.8 percent after Goldman Sachs and Morgan Stanley upgraded the shares. The decline in U.S. futures indicated the S&P 500 may retreat from its highest level in five weeks. The Labor Department will say applications for unemployment benefits rose last week to 459,000 from 451,000, a Bloomberg survey showed. The Federal Reserve Bank of Philadelphia may say its general economic index advanced to 0.5 in September from minus 7.7 a month earlier, according to a separate survey. Another report will probably indicate wholesale costs in the U.S. increased for a second month in August. The yen strengthened against 12 of its 16 most-traded peers, gaining 0.1 percent to 85.63 per dollar, after plunging 3.3 percent yesterday. Vice Finance Minister Motohisa Ikeda declined to comment in Tokyo today on whether the Japanese government is intervening again in currency markets. Congressional Hearing China’s yuan climbed 0.2 percent to 6.7257 per dollar, the strongest level since 1993. The central bank set the reference rate at a record high for a fifth straight day as Treasury Secretary Timothy F. Geithner said the U.S. is considering ways to urge China to let the currency appreciate faster. Geithner testifies to the House of Representatives today on the Asian nation’s exchange-rate policy. The Swiss franc appreciated through parity with the dollar for the third consecutive day before a central bank meeting at which economists expect policy makers to leave the key interest rate at 0.25 percent. The pound fell 0.2 percent against the dollar and 0.7 percent per euro. New Zealand’s dollar weakened against all 16 of its most-traded peers after the nation’s central bank left interest rates on hold and said further increases are likely to be “more moderate” than previously projected. Oil, Gasoline October crude oil declined 1 percent to $75.28 a barrel and October gasoline slid 1.2 percent in electronic trading on the New York Mercantile Exchange after a government report yesterday showed slowing U.S. demand for motor fuel and Enbridge Energy Partners LP said it’s preparing to start a damaged U.S. crude pipeline tomorrow. The S&P GSCI Total Return index of 24 commodities fell 0.4 percent, the second consecutive decline. Raw sugar declined 0.8 percent. Tin for delivery in three months climbed as much as 1.1 percent to $23,410 a metric ton on the London Metal Exchange, the highest price since July 23, 2008. Inventories of the metal have dropped 49 percent this year. The yield on the 10-year U.S. Treasury note fell 1 basis points to 2.71 percent. Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., cut holdings of government-related debt for a second month in August. The $248 billion Total Return Fund reduced its investment in the debt to 36 percent of assets, the smallest amount since April, from 54 percent the previous month, according to the website of the Newport Beach, California-based company. To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net

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