European stocks retreated after a six-day rally pushed valuations to the highest level in two months, overshadowing a record profit forecast from Intel Corp. U.S. index futures and Asian shares advanced. ICAP Plc led declining shares after saying trading volumes “slowed significantly” in June. BP Plc fell 2.2 percent as the company delayed testing of a new cap placed over its leaking Gulf of Mexico oil well. Technology companies limited the drop as Intel, the world’s biggest chipmaker, jumped 6 percent in pre-market New York trading. ASML Holding NV surged 5.4 percent after reporting profit that beat estimates. The Stoxx Europe 600 Index retreated 0.6 percent to 254.54 at 1:07 p.m. in London. The measure had risen 8.2 percent over the previous six days, leaving the gauge trading at more than 16 times its companies’ reported profits, the highest valuation since May, according to Bloomberg data. “The market needed a breather it was looking as if it got a little bit ahead of itself,” said Mike Lenhoff, London-based chief strategist at Brewin Dolphin Securities Ltd., whose parent company oversees $33 billion. “Earnings are coming in a little bit better than expected but the season is just getting under way. The market might not be quite confident enough about whether it should be pushing forward or not.” Standard & Poor’s 500 Index futures climbed 0.2 percent, indicating the benchmark gauge for U.S. equities will rise for a seventh day. The MSCI Asia Pacific Index jumped 1.4 percent as Singapore raised its economic growth forecast. Retail Sales A report today may show sales at U.S. retailers fell in June for a second month. Purchases decreased 0.3 percent following a 1.2 percent drop in May, according to the median estimate in a Bloomberg survey of economists. Other data may show the cost of imported goods fell, while inventories climbed. ICAP, the biggest broker of transactions between banks, dropped 4.9 percent to 414.9 pence after saying “volumes slowed significantly in June as our customers’ and end investors’ risk appetites reduced.” The company also said analysts’ profit forecasts appear “reasonable.” Numis Securities Ltd. lowered its recommendation for ICAP to “hold” from “add,” saying they do not expect to materially change their earnings forecast of 350 million pounds ($534 million). BP dropped 2.2 percent to 401.25 pence as the company delayed testing the oil-well cap to give scientists more time to study the procedure used to measure pressure levels and crude fell below $77 a barrel. Storage Ownership The company, which is fighting to contain the largest oil spill in the U.S., is also moving away from storage ownership at a key U.S. oil delivery point as it cedes control of its tanks in Cushing, Oklahoma, as part of a $289 million sale of assets to Magellan Midstream Partners LP. ITV Plc declined 3.7 percent to 52.5 pence after BofA Merrill Lynch Global Research lowered its recommendation for the U.K.’s biggest commercial broadcaster to “underperform” from “neutral,” citing the shares “expensive” valuations. ARM Holdings Plc led a gauge of technology companies to two-week high, limiting declines in the Stoxx 600. The shares rallied 3.4 percent to 319.4 pence as Intel, whose processors run more than 80 percent of the world’s personal computers, surged 6.1 percent to $22.30 in early New York trading. Intel Earnings Intel reported second-quarter sales of $10.8 billion, topping the average analyst estimate of $10.3 billion. Net income was $2.89 billion, or 51 cents a share. The chipmaker said its gross-profit margin will reach 66 percent this year and forecast third-quarter sales of about $11.6 billion, beating analysts’ estimates of $10.9 billion in a Bloomberg survey. Intel’s results followed better-than-expected profit from Alcoa Inc. and CSX Corp. yesterday, among 23 companies in the S&P 500 to announce earnings this week. Earnings for the gauge’s companies are projected to have climbed 34 percent in the second quarter and by the same amount in 2010, according to analyst estimates compiled by Bloomberg. STMicroelectronics NV, Europe’s biggest chipmaker, increased 2.2 percent to 6.91 euros and Infineon Technologies AG rose 2.3 percent to 5.30 euros. ASML jumped 5.4 percent to 25.72 euros after reporting second-quarter net income of 239 million euros ($304 million) as chip companies increased spending to meet demand. That compared with a net loss of 104 million euros a year earlier and beat the average analyst estimate of 203 million euros. London Stock Exchange Group Plc climbed 1.9 percent to 616 pence after reporting a 0.8 percent increase in first-quarter sales to 158.2 million pounds as the bourse made more money from technology. For Related News and Information: Developed Markets View: DMMV <GO> World stock indexes: WEI <GO> Stoxx 600 market map: SXXP <Index> IMAP <GO> Top stories on stocks: TOP STK <GO> Equity screening: EQS <GO> Graphing: GRAPH <GO> Equity derivatives: EDRV <GO> Feature stories on stocks: TNI STK GREET <GO> To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

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