On Friday European stocks dropped, on course for their biggest weekly selloff since September, amid signs of slowing growth in China and after Moody’s Investors Service downgraded Spanish lenders. U.S. index futures fluctuated, while Asian shares fell.
Rio Tinto Group and Volkswagen AG paced a decline by mining companies and carmakers. Industrial goods companies retreated after Caterpillar Inc. reported slowing sales.
The Stoxx 600 dropped 1 percent to 239.28 at 9:57 a.m. in London, extending its decline this week to 5 percent and its slide this month to 7 percent.
The benchmark Stoxx 600 declined 1.1 percent on Thursday as the European Central Bank temporarily halted lending to some Greek banks and speculation mounted that Moody’s would downgrade Spanish lenders.
Almost $4 trillion has been wiped from global equity markets this month amid mounting concern Greece will have to leave the euro currency union. The country’s credit rating was reduced one level by Fitch Ratings late on Thursday amid concern it will not muster the political support needed to remain a member of the 17-nation euro area.
Moody’s lowered debt ratings at 16 Spanish banks, citing mounting loan losses, the country’s recession, restricted access to funds and the reduced ability of the government to support lenders as its own creditworthiness diminishes.
The rating company cut nine lenders by three notches, including Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA and kept seven on review for further reductions, it said in a statement after the close of U.S. trading on Thursday. The moves follow Moody’s May 14 downgrade of 26 Italian banks and its 13th February cut of Spain’s sovereign-debt rating.
A gauge of mining companies dropped after data showed house prices fell in a record number of Chinese cities last month and car dealers posted inventory levels that indicated deeper price cuts.
Japanese stocks fell, with the Topix Index capping the longest streak of weekly losses since the attacks of the 11th September in 2001, as exporters declined after U.S. economic data missed estimates and a rating cut of Spanish banks fueled concern Europe’s debt crisis is deepening.