European stocks and U.S. index futures declined before the Federal Reserve indicates whether there will be more stimulus measures. Treasuries rose, while the pound weakened and oil retreated. The Stoxx Europe 600 Index dropped 0.6 percent at 7:35 a.m. in New York as Royal Philips Electronics NV plunged the most in more than two years. Standard & Poor’s 500 Index futures slipped 0.3 percent. Treasuries rose, keeping 10-year yields below 3 percent for a sixth day. The euro lost 0.3 percent to $1.4382, after dropping as much as 0.5 percent. The pound slid 0.7 percent against the dollar after some Bank of England members said further stimulus may be needed. Oil sank 0.7 percent. The Fed will probably affirm a decision to end bond purchases and repeat a pledge to keep the benchmark interest rate close to zero, economists said in a Bloomberg survey before today’s announcement. BOE officials voted 7-2 to keep interest rates on hold this month, with some warning that the economy is weakening. Greece’s government won a vote of confidence and needs parliamentary approval next week for 78 billion euros ($112 billion) in budget cuts to stave off default. “Though no increase in the Fed’s asset purchase program is expected at this stage, the tone is expected to be dovish following recent weak economic data,” said Gary Jenkins, head of credit strategy at Evolution Securities Ltd. in London. The Stoxx 600’s decline followed the gauge’s biggest gain yesterday in two months. Philips, the world’s biggest maker of light bulbs, tumbled 12 percent in Amsterdam trading after saying it will need to deepen cost-cutting to combat deteriorating demand for lighting and consumer electrical goods such as headphones. Home Prices The drop in S&P 500 futures indicated the benchmark U.S. gauge will snap a four-day advance. The U.S. Federal Open Market Committee concludes its two-day meeting today and will release a statement at 12:30 p.m. in Washington. Fed Chairman Ben S. Bernanke is scheduled to meet the press at 2:15 p.m. Federal Housing Finance Agency data at 10 a.m. may show home prices fell 0.3 percent in April, according to a Bloomberg survey of economists. The 10-year Treasury yield fell two basis points to 2.96 percent. The yield on the 10-year Greek bond was little changed after falling as much as eight basis points. The similar- maturity Irish yield advanced 27 basis points. The two-year German note yield slipped two basis points, dropping for the first time in four days. The Markit iTraxx Financial Index of credit-default swaps protecting the senior debt of 25 European banks and insurers climbed seven basis points to 161, according to JPMorgan Chase & Co. EFSF Debt Sale The European Financial Stability Facility started selling 3 billion euros ($4.3 billion) of bonds due December 2016 to help fund euro-area nations’ contribution to the bailout of Portugal, according to two people with knowledge of the matter. The notes may be priced to yield about seven basis points more than the benchmark mid-swap rate and the issue is scheduled to be completed this week, said the people. Crude oil in New York fell 63 cents to $93.54 a barrel before a U.S. government report today that may show stockpiles declined less than analysts forecast last week. Copper lost 0.9 percent. The MSCI Emerging Markets Index climbed 0.2 percent, for its first back-to-back gain in three weeks as South Korea’s Kospi Index (KOSPI) jumped 0.8 percent. Dubai’s DFM General Index (DFMGI) retreated 1.8 percent after MSCI Inc., whose stock indexes are tracked by investors with about $3 trillion in assets, delayed to December its decision on whether to raise the United Arab Emirates and Qatar to emerging-market status. Gauges in Russia, Poland, Egypt and South Africa lost at least 0.5 percent. The pound depreciated against all its major counterparts. Bank of England policy makers Spencer Dale and Martin Weale continued a push for a quarter-point increase in the benchmark rate. Governor Mervyn King and the other six members of the Monetary Policy Committee, including Ben Broadbent, voted for no change. Adam Posen kept up a call for more bond purchases. To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net. To contact the editor responsible for this story: Paul Sillitoe at psillitoe@bloomberg.net

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