On Friday European stocks sank, dragging the Stoxx Europe 600 Index to the biggest two-day drop since November 2008, amid growing concern the global economy is slowing. Asian shares and U.S. index futures retreated.

Royal Dutch Shell Plc, Europe’s biggest oil company, dropped 3.9 percent as crude headed for a fourth weekly loss. Volkswagen AG declined 5.4 percent as a gauge of auto-industry shares slid to a 12-month low. Autonomy Corp. jumped 74 percent after the U.K.’s second-largest software company agreed to be bought by Hewlett-Packard Co. for $10.3 billion.

The Stoxx 600 has fallen 7.2 percent this week, heading for a fourth straight decline as economic reports indicated the economy is weakening. The Federal Reserve Bank of Philadelphia’s general economic index fell more than forecast this month to the lowest since March 2009, and U.S. initial jobless-benefit claims climbed last week, according to reports on Thursday. Data published on the 16th August showed Germany grew at a slower-than-estimated pace in the second quarter.

National benchmark indexes declined in all western European markets except Iceland. France’s CAC 40 lost 2.9 percent, the U.K.’s FTSE 100 slipped 2.5 percent and Germany’s DAX sank 3.7 percent.

The U.S. economy may expand less than previously forecast in 2011 and 2012 because of potential “political paralysis” and fiscal tightening steps, according to Citigroup Inc.

The brokerage cut its 2011 gross domestic product growth forecast to 1.6 percent from 1.7 percent and lowered its 2012 expansion estimate to 2.1 percent from 2.7 percent, Steven Wieting and Shawn Snyder, analysts at Citigroup, wrote in a report dated 18th August.

JPMorgan Chase & Co. cut its U.S. economic growth estimate for the fourth quarter to 1 percent from 2.5 percent and reduced its forecast for the first quarter of 2012 to 0.5 percent from 1.5 percent.