European stocks posted the biggest weekly decline in seven weeks as economic reports from the U.S. and Japan heightened concern that the global economic recovery may be stalling. Vestas Wind Systems A/S led energy companies lower, plunging 23 percent, after the wind-turbine maker cut its revenue forecast. Holcim Ltd., the world’s second-biggest cement maker, lost 5.1 percent as earnings missed estimates. BHP Billiton Ltd. sank 6.3 percent after making a hostile $40 billion bid for Potash Corp. of Saskatchewan Inc. The benchmark Stoxx Europe 600 Index fell 1.3 percent to 252.15 this past week, the biggest drop since July 2, as reports showed U.S. jobless-benefit claims climbed to the highest level in nine months and Japan’s economy grew at the slowest pace in three quarters. “The data is obvious: it is a slowdown,” said Herbert Perus, Vienna-based head of equities at Raiffeisen Capital Management. “The recovery will not go on in a straight line. Big investors are positioned for a double-dip scenario.” The Stoxx 600 has retreated 7.4 percent from this year’s high in April amid concern that European governments will struggle to reduce their budget deficits and speculation that the U.S. economy may tip back into recession. The gauge is almost unchanged for the year. Benchmark Indexes National benchmark indexes fell in 16 out of 18 western European markets this week. France’s CAC 40 dropped 2.4 percent and Germany’s DAX slid 1.7 percent. The U.K.’s FTSE 100 retreated 1.5 percent. U.S. Labor Department figures showed applications for unemployment benefits last week unexpectedly increased to the highest level since November. Initial jobless claims rose by 12,000 to 500,000 in the week ended Aug. 14, exceeding economists’ forecasts. Japan’s economy grew at less than a fifth of the pace economists estimated in the second quarter, expanding an annualized 0.4 percent. In Europe, German investor confidence dropped to a 16-month low in August, according to the Mannheim- based ZEW Center for European Economic Research. Vestas, the world’s biggest wind-turbine maker, tumbled 23 percent. The company cut its annual sales forecast to 6 billion euros ($7.6 billion) from 7 billion euros and reported its second straight quarterly loss as a lack of financing caused customers to delay or cancel renewable-energy projects. Energy Shares A measure of energy stocks posted the biggest decline among 19 industry groups in the Stoxx 600 as crude oil fell to a six- week low in New York. BP Plc slid 6.7 percent, the biggest weekly drop since June, as a group of scientists said as much as 79 percent of the oil that leaked from its Macondo well remains in the Gulf of Mexico, challenging an Obama administration assessment that the crude is largely gone or rapidly disappearing. SBM Offshore NV, the world’s largest producer of floating oil production platforms, dropped 6 percent after reporting first-half earnings that missed analyst estimates and saying it expects some Gulf of Mexico projects to be delayed because of the drilling moratorium that followed the BP spill. Holcim retreated 5.1 percent, dragging a gauge of construction-industry stocks 1.7 percent lower. Second-quarter net income declined 12 percent to 399 million Swiss francs ($386 million), missing the 561 million-franc average estimate in a Bloomberg survey. FLSmidth & Co. A/S, the world’s largest maker of cement kilns, tumbled 9.2 percent as earnings also trailed estimates. BHP Billiton Bid BHP Billiton lost 6.3 percent after the world’s largest mining company made a hostile $130 a share bid for Potash Corp. to diversify sales and benefit from surging demand for fertilizer as food needs grow. BHP had its A+ long-term credit rating placed on creditwatch with negative implications by Standard & Poor’s Ratings Services, which said “the proposed acquisition will significantly increase BHP Billiton’s debt burden and could weaken the group’s financial risk profile.” Even so, the resurgence of takeovers limited declines in European stocks. Dana Petroleum Plc gained 7.2 percent as Korea National Oil Corp. made a hostile 1.87 billion-pound ($2.9 billion) bid for U.K. explorer. BG Group Plc, the U.K.’s third-largest natural gas producer, surged 6.5 percent as investors speculated that it may become the next natural resources company to attract a takeover bid. This year is on course to be the busiest for deals involving miners, oil producers and chemical makers, according to Bloomberg data. ITV Rallies ITV Plc, the U.K.’s biggest commercial broadcaster, surged 9 percent for the biggest gain in the Stoxx 600 after the Daily Mail said that General Electric Co.’s NBC Universal may be interested in a takeover. Allison Gollust, a spokeswoman for NBC in New York said it’s the company’s policy to never comment on reports related to merger activity. Susanna Voyle, a spokeswoman for ITV, also declined to comment. Hochtief AG advanced 6.3 percent as Germany’s largest construction company raised its outlook for orders this year. The inflow of new work and the order backlog will exceed 2009 levels, the company said. To contact the reporter on this story: Peter Evans in London at pevans15@bloomberg.net.

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