July 15 (Bloomberg) -- Investor sentiment for U.S. stocks fell to the lowest level since March and confidence in equities around the world declined as prospects for the global economy worsened in June, according to a survey of Bloomberg users. The Bloomberg Professional Confidence Survey’s measure for the Standard & Poor’s 500 Index fell 14 percent to 39.59 in July, its second consecutive drop. Readings below 50 show participants expect equity prices will decrease in the next six months. The 2,088 respondents also said the outlook has worsened for stocks in Brazil, Japan, Spain, Switzerland and the U.K., the broadest sentiment slump in four months. The MSCI World Index of 23 developed nations declined 4.7 percent after it became the most expensive compared with profits since 2004 and the World Bank said June 22 that the recession will be deeper than previously forecast. In the U.S., the jobless rate reached a 26-year high and consumer optimism unexpectedly fell. “Unless future profits considerably beat expectations, markets will struggle to make new highs,” said Jonathan Plant, a London-based strategist at Liberum Capital Ltd. who took part in the survey. “It’s a balance-sheet and credit-crisis correction that will continue to be driven by employment and consumer confidence.” Hoarding Cash The survey’s gauge for the S&P 500 rose to a record 51.6 in May as the index posted a 40 percent gain from a 12-year low on March 9, the steepest rally since the 1930s. The S&P 500 has dropped 4.3 percent from a seven-month peak on June 12 as the U.S. savings rate reached 6.9 percent, the highest since December 1993, spurring concern consumer spending will wane as unemployment nears 10 percent. The Bloomberg survey’s U.S. reading fell from 46.26 in June. In the U.K., the gauge slid 7.4 percent to 42.32. The FTSE 100 Index has dropped 4.5 percent from an almost five-month high on June 1 amid speculation equities have outpaced the outlook for economic growth after a three-month, 28 percent rally pushed valuations to the highest in five years. Sentiment decreased 12 percent to 29.77 on Spain’s IBEX 35, which has added 3.5 percent since the start of June. Consumer prices are falling for the first time since 1952 as the nation suffers from the combined impact of the global financial crisis and the collapse of a domestic building boom, according to the Bank of Spain. Switzerland, where the confidence index fell 22 percent to 39.52, also faces the risk of deflation after producer and import prices slid the most in two decades in June. The Swiss Market Index rose 1.9 percent since May. ‘Pretty Bad’ “Markets are prepared for pretty bad economic numbers,” said Michael Holland, who oversees more than $4 billion at Holland & Co. in New York. “At some point we’ll get out of this, but nobody knows when.” Investors grew less bullish in Brazil, with the confidence index dropping 5.7 percent to 60.85 in July. The Bovespa has surged 30 percent this year on speculation a rebound in commodity prices and falling interest rates will bolster growth in Latin America’s largest economy. The stock index fetches 19.6 times earnings, more than double its ratio at the beginning of 2009. Mexico’s sentiment gauge was little changed, falling less than 0.1 percent to 50.5. Japanese respondents turned bearish, with the measure dropping 12 percent to 47.6. The Nikkei 225 Stock Average fell nine straight days through July 13, including every day the Bloomberg survey was administered from July 6 to July 10, on weaker-than-estimated machinery orders, a stronger yen and Prime Minister Taro Aso’s plan to dissolve parliament. The Nikkei climbed 4.6 percent in June and has lost 6.9 percent this month. Germany, Italy, France Pessimism decreased on the DAX in Germany, where confidence rose 10 percent to 46.98. Industrial output jumped 3.7 percent in May from April, the biggest gain in almost 16 years, and business confidence increased for a third month in June. The DAX has advanced 33 percent since the 4 1/2-year low reached on March 6. Italy’s measure rose 1.7 percent to 49.24, and France’s index increased 0.9 percent to 47.96. To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.

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