European stocks declined for a second day as investors weighed the German election result and statements on monetary policy from Federal Reserve officials William C. Dudley and Dennis Lockhart.

The Stoxx Europe 600 Index retreated 0.5 percent to 312.63 at 4:41 p.m. in London. The gauge has still surged 9.7 percent this quarter, on course for the biggest gain in four years. The measure advanced for a third week last week, extending its rally this year to 12 percent, after the Fed unexpectedly refrained from reducing its monthly asset purchases.

Fed Bank of New York President Dudley said today that policy makers must “forcefully” push against economic headwinds as the U.S. has yet to show “any meaningful pickup” in momentum. Lockhart, the Atlanta Fed president, said U.S. monetary policy should focus on creating a more dynamic economy following a recent slowing in growth.

German Chancellor Angela Merkel’s Christian Democratic bloc won 41.5 percent of the vote in yesterday’s election. After Merkel’s Free Democratic allies failed to take any seats in the lower house of parliament, her possible coalition partners are the Social Democratic opposition and the Green party. Negotiations to form German governments usually last from four to six weeks.

National benchmark indexes fell in 16 of the 18 western-European markets.

FTSE 100 6,557.37 -39.06 -0.59% CAC 40 4,172.08 -31.58 -0.75% DAX 8,635.29 -40.44 -0.47%

Sabadell declined 2.9 percent to 1.84 euros and Barclays dropped 2.7 percent to 266.1 pence. A gauge of financial shares was the second-worst performer in the MSCI World Index as Atlantic Equities LLP forecast a drop in fixed-income trading revenue for the biggest U.S. banks. Citigroup Inc. may post a decline in annual sales of more than 10 percent, the Financial Times reported. The newspaper said the New York-based bank declined to comment.

National Grid slipped 1.7 percent to 746 pence. UBS downgraded the shares to neutral from buy, saying the price already reflects growth projections for the company. The stock trades at 14.3 times estimated earnings, compared to its five-year average of 11.7 times, data compiled by Bloomberg show.

Metso retreated 3.3 percent to 30.76 euros as Morgan Stanley cut its rating on the stock to equal weight, similar to a hold recommendation, from overweight. The brokerage cited worse-than-projected orders for mining equipment in the first half of the year.

Infineon Technologies AG gained 1.5 percent to 7.60 euros after Boersen-Zeitung reported that the company’s full-year profit will be 20 percent greater than its forecasts amid signs of a global chip-market recovery. The newspaper cited an interview with Chief Financial Officer Dominik Asam.

Finmeccanica SpA increased 4 percent to 4.71 euros, its highest price in seven months amid separate reports from La Repubblica and Corriere della Sera of bids for some of the Italian arms company’s holdings.