European Stocks Decline, Led by Nokia, Syngenta, RBS, Barclays

European stocks fell the most in two months on concern a weaker dollar will curb profits for technology and chemical companies and more banks will report losses related to subprime mortgage defaults in the U.S.

Nokia Oyj, Alcatel-Lucent SA and Syngenta AG paced a decline by companies that rely on the U.S. for revenue. Royal Bank of Scotland Group Plc, UniCredit SpA and Barclays Plc led financial shares lower.

The Dow Jones Stoxx 600 Index lost 1.6 percent to 367.57, the biggest drop since Sept. 7, bringing the weekly decline to 3.3 percent and almost erasing this year's gains. Wachovia Corp. of the U.S. said today it may raise allocations for loan losses.

``The sudden spikes of the euro are causing increasing concern currency effects may have a negative impact on earnings,'' said Helge Rechberger, head of equity market research at Raiffeisen Zentralbank in Vienna. ``Wachovia's announcement also weighs on the market.''

Analysts have cut their earnings growth forecasts for Stoxx 600 companies this year to 9.2 percent from 9.9 percent at the start of last month, data compiled by Bloomberg shows.

The risk of European companies defaulting on their debt rose, according to traders of credit-default swaps. European government bonds gained for a third day on speculation losses from the U.S. housing market will spread, fueling demand for the safest assets.

National Benchmarks

National benchmarks dropped in all 18 western European markets, except in Portugal and Ireland. The U.K.'s FTSE 100 slid 1.2 percent, and France's CAC 40 sank 1.9 percent. Germany's DAX lost 0.1 percent. The Stoxx 50 lost 1.7 percent, and the Euro Stoxx 50, a measure for the euro region, slid 1.5 percent.
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