European stocks snapped an eight-day advance, commodities fell and the dollar strengthened amid speculation the Federal Reserve’s decision to tie interest rates to unemployment will bring forward increases in borrowing costs. The Stoxx Europe 600 Index slid 0.4 percent at 10:21 a.m. London time, and Standard & Poor’s 500 Index futures slipped 0.2 percent. Copper declined 0.7 percent, while silver tumbled 2.5 percent. The Dollar Index rose for the first time in four days as the yen pared a decline that took it to a more than eight- month low. The MSCI Asia Pacific (MXAP) Index climbed 0.3 percent, extending the longest-winning streak in more than three years, and China’s yuan appreciated the most since March. The Fed said yesterday it would buy $45 billion of Treasuries per month starting in January, while interest rates would stay low “at least as long� as unemployment remains above 6.5 percent and if inflation is projected to be no more than 2.5 percent. U.S. reports today will show retail sales climbed and the number of Americans applying for jobless benefits fell, according to Bloomberg surveys of analysts. “The unemployment rate is declining just about 1 percent a year for the past two years, and could be not far off 6.5 percent in 12 months,� Fred Goodwin, a strategist at State Street Corp. in London, wrote in a research note. “The Fed is horrific at forecasting. They have completely underestimated how fast the unemployment rate would fall from the beginning of this cycle. Why are they suddenly going to get this right?� The Stoxx 600’s decline ended the longest run of gains in 19 months. Volvo AB (VOLVB), the world’s second-largest truckmaker, slid 3.2 percent as Renault SA sold its 6.5 percent stake for 12.8 billion kronor ($1.92 billion) to boost funding. Renault, France’s second-biggest automaker, climbed 1.6 percent. To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net

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