European stocks fell for a second day

European stocks fell for a second day, with the benchmark index heading for its biggest weekly drop in almost a month, as investors speculated that equity gains have overshot the earnings outlook. U.S. index futures were little changed, while Asian shares slid.

The Stoxx Europe 600 Index fell 1.3 percent to 329.06 at 10:59 a.m. in London. The gauge is heading for a weekly retreat of 3.1 percent, the biggest since March 14, amid a selloff in shares with higher-than-average valuations. Futures on the Standard & Poor’s 500 Index added less than 0.1 percent today, while the MSCI Asia Pacific Index dropped 0.9 percent.

The Stoxx 600 has more than doubled from a low in March 2009, with its valuation rising to 14.4 times estimated earnings compared with a five-year average of 12.3 times.

Thales fell 4.5 percent to 45.70 euros. JPMorgan Chase downgraded the French defense-electronics maker to neutral from overweight, meaning investors may no longer buy the stock. The company’s forecasts for sales and cost reduction through 2017-18 are weaker than estimated, the brokerage said.

Givaudan SA declined 1.9 percent to 1,378 Swiss francs. Comparable sales at its flavor division rose 5.8 percent in the first quarter, the world’s biggest maker of flavoring products said. That missed the 6.5 percent increase estimated by analysts in a Bloomberg survey. Total comparable sales increased 5.7 percent for the quarter, exceeding the 5.6 percent average analyst forecast.

Bauer AG lost 3.8 percent to 18.92 euros after posting a 2013 net loss of 19.4 million euros, compared with a profit of 25.8 million euros a year earlier. The company said it is negotiating a syndicated loan with bankers as it could not meet some debt covenants. Bauer said it won’t propose a dividend.

Salzgitter advanced 1.8 percent to 30.98 euros after Citigroup upgraded the shares to buy from neutral, saying the German steelmaker will benefit from any increase in construction-related demand in Europe.

In the U.S., a preliminary report at 9:55 a.m. New York time may show the University of Michigan’s consumer confidence index rose to 81 in April from 80 a month earlier, according to the median forecast of economists surveyed by Bloomberg.

FTSE 100 6,562.86 -79.11 -1.19%

CAC 40 4,362.47 -51.02 -1.16%

DAX 9,322.29 -132.25 -1.40%