European Stocks Retreat, U.S. Futures Slump Amid Falling Oil Prices

LONDON (The Deal) -- European stocks retreated on Wednesday, with a string of disappointing news from companies including BHP Billiton (BHP) and Royal Dutch Shell (RDS.A) , and as falling oil prices rattled markets worldwide.

In London, the FTSE 100 was 2.91% lower at 5,705.77, while in Paris the CAC 40 slid 3.33% to 4,129.90. In Frankfurt, the DAX fell nearly 3% to 9,375.71. 

European stocks trailed Asia lower as Brent crude dipped below $28 a barrel, close to a 12-year-low, amid expectations of increased supply on the world market following the recent lifting of sanctions against Iran. 

News of a brighter job market in the U.K. did little to lift the mood, with the Office of National Statistics reporting a 74.0% employment rate for the September to November period, the highest since it began keeping records in 1971. The unemployment rate for the same period fell to 5.1% from 5.8% a year earlier. 

Later Wednesday, the focus shifts to the U.S. for a string of key data from the world's largest economy including the Consumer Price Index and housing starts. 

S&P 500 futures were down 1.94% ahead of Wall Street's opening. 

In London morning trading, mining company BHP Billiton was among the biggest decliners. 

It stumbled 6.84% after cutting its full-year forecast for iron ore output due to an activity suspension in Brazil as a result of a dam collapse in Brazil. The company is now predicting that it will ship 237 million metric tons of iron ore this year, down from a previous forecast of 247 million metric tons. 

Among other mining stocks, Anglo American (AAUKF)  fell 6.03% while Glencore (GLNCY) retreated 5.25%. 

Royal Dutch Shell declined 5.81% after saying that it expects fourth-quarter profit to drop to $1.6 billion to $1.9 billion, from $3.3 billion a year earlier, when it reports full-year 2015 figures on Feb. 4. Shell also said that preparations are "well advanced" for $30 billion in asset sales in 2016-2018, assuming the successful completion of the combination with BG Group

Shell shareholders are due to vote on the GBP 35.1 billion ($39.7 billion) deal on Jan. 27. BG shares were 2.35% lower. 

In Paris, Vinci fell 3.39% amid a report in Spain's Expansión newspaper that it has held talks with struggling Spanish renewables company Abengoa over the possible acquisition of its largest unit Abeinsa. 

In Switzerland, Zurich Insurance Group  (ZURVY) slumped more than 8% lower as the country's largest insurer faces a patch of stormy weather -- literally. 

It predicted a first-quarter operating loss of $100 million at its general insurance business, blaming claims related to natural disasters including storms and floods in the U.K. and Ireland and a "significant level" of large losses. 

In Madrid, Laboratorio Reig Jofre was down 1.14%. The Barcelona-based pharmaceutical firm will market the Sterimar line of nasal hygiene products made by Ewing, New Jersey-based Church & Dwight (CHD)  under an exclusive license agreement announced on Wednesday. 

Bucking the negative trend, ASML Holding  (ASML) rose 2.30% in Amsterdam. Europe's largest semiconductor-equipment announced plans to buy an additional €1 billion of its stock, which comes on top of €500 million remaining from a previous buyback scheme. It also suggested raising its dividend by 50%. 

The Veldoven, Netherlands-based company -- whose customers include Samsung and Intel -- forecast first-quarter 2016 sales to fall to about €1.3 billion, from €1.65 a year earlier. But sales are expected to increase significantly in the second quarter as order picks up for new equipment. 

In Asia, the Hang Seng tumbled 3.82% to 18,886.30, while the Nikkei slid 3.71% to 16,416.19 in Tokyo. 

On mainland China, the CSI 300 composite index, which combines stocks listed in both Shanghai and Shenzhen, ended the day 1.51% lower at 3,174.38.

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