European stocks dropped after the Federal Reserve trimmed bond buying for a second straight meeting and companies from Diageo Plc to Hennes & Mauritz AB posted results that missed analyst estimates. The Federal Open Market Committee said yesterday it will cut monthly bond purchases by $10 billion to $65 billion, sticking to a plan for a gradual withdrawal from its unprecedented monetary easing. It was the first meeting without a dissent since June 2011. The Fed reiterated that it will probably hold its target interest rate near zero “well past the time” that unemployment falls below 6.5 percent.

A Chinese manufacturing gauge signaled the first contraction since July. A Purchasing Managers’ Index fell to 49.5 this month from 50.5 in December, HSBC Holdings Plc and Markit Economics said in a statement. The reading compared with the median 49.6 estimate in a Bloomberg News survey of 14 economists. A number below 50 indicates contraction.

Diageo lost 6.7 percent, the most since February 2009, to 1,782 pence. Organic sales rose 1.8 percent in the six months through December, missing the median analyst estimate of 3.5 percent. The maker of Smirnoff vodka and Johnnie Walker whisky said operating profit excluding some items was 2.06 billion pounds ($3.4 billion).

H&M, Europe’s second-biggest clothing retailer, dropped 3.7 percent to 276.60 kronor. The company reported fourth-quarter net income of 5.61 billion kronor ($869 million), less than the average analyst projection of 6 billion kronor.

Givaudan climbed 5.6 percent to 1,332 francs. The world’s largest maker of flavors and fragrances said 2013 net income was 490 million francs, exceeding the 464.5 million-franc analyst projection. The company said it will pay a dividend of 47 francs a share, beating the Bloomberg Dividend Forecast of 42 francs.

Ericsson AB rose 2.8 percent to 79.55 kronor. The world’s largest maker of wireless networks said gross ">FTSE 100 6,522.86 -21.42 -0.33%

CAC 40 4,141.92 -15.06 -0.36%

DAX 9,298.81 -37.92 -0.41%