Euro stocks, US index futures fall on economy, job concerns

European stocks fell, extending this week’s decline, and US index futures retreated as a slump in commodity prices sent metal and energy producers lower and concern deepened the global economy is worsening.

BHP Billiton Ltd tumbled 6.4 per cent as copper slumped for a seventh day. BP Plc and Total SA sank more than 5 per cent as crude headed for its biggest weekly slide since March 2003. TNT NV, Europe’s second-biggest express-delivery company, dropped 5 per cent as Deutsche Bank AG recommended selling the stock.

The Dow Jones Stoxx 600 Index lost 1.9 per cent to 193.68 at 11:30 am in London, with all 19 industry groups decreasing except for health care. A report today may show US employers cut jobs last month at the fastest pace in a quarter century, pushing the world’s largest economy deeper into recession.

“The concern is depression,” said Patrick Sumner, a London-based portfolio manager at Henderson Global Investors, which has about $77.2 billion in assets under management. The situation will get worse “if the deterioration in the economy is sustained,” he told Bloomberg Television.

Futures on the Standard & Poor’s 500 Index decreased 0.3 per cent. Stocks fell yesterday, pushed down by concern General Motors Corp may file for bankruptcy and Merrill Lynch & Co’s prediction that oil will hit $25 a barrel.

Europe’s Stoxx 600 has fallen 6.1 per cent this week, paring about half of last week’s record advance, as reports signaled the global economy is worsening. The European Central Bank cut its benchmark interest rate yesterday by the most in the bank’s 10-year history after record declines in European and Chinese manufacturing and more job losses in the US.

In the US, payrolls shrank by 333,000 workers last month, the biggest drop since July 1982, according to the median estimate in a Bloomberg News survey. The jobless rate may have jumped to 6.8 per cent, the highest level since 1993.

The cost of protecting corporate bonds from default climbed to a record ahead of the report.

“We are of course focused on non-farm payrolls which is giving us a negative skew,” said Manus Cranny, a London-based equity market analyst at MF Global. “There is a vice-like grip on the market. We have given up any ideas of an optimistic view” for stocks, he told Bloomberg Television.

More than $31 trillion has been erased from the value of global equities this year as the US mortgage market collapse, freezing credit and pushing the US, Japan, Germany and the UK into recessions. Debt losses and writedowns by the world’s largest lenders and insurers have approached $1 trillion in the worst financial crisis since the Great Depression.

National benchmarks fell in all 18 western European markets except Iceland and Ireland. The FTSE 100 lost 1.1 per cent, as Royal Dutch Shell Plc and Antofagasta Plc retreated. France’s CAC 40 declined 2.7 per cent, while Germany’s DAX decreased 2.5 per cent