European stocks dropped the most in more than five weeks as better-than-forecast U.S. jobless claims fueled speculation the Federal Reserve will taper its bond-buying program this year.

The Stoxx Europe 600 Index slid 1.1 percent to 305.24 at 4:30 p.m. in London, its largest drop since July 5. The equity benchmark yesterday rose to its highest level since May 22 as the euro area’s economy returned to growth in the three months through June after six quarters of contraction. It has still rallied 11 percent from a low on June 24.

In the U.S., a Labor Department report showed fewer Americans applied for unemployment benefits last week. Jobless claims (INJCJC) in the week ended Aug. 10 fell to 320,000 from a revised 335,000 a week earlier. The median forecast of economists had called for a reading of 335,000.

A Fed report showed that output from U.S. factories, mines and utilities was unchanged in July, after gaining a revised 0.2 percent in June. The median estimate of economists surveyed had called for a 0.3 percent increase.

A separate release showed manufacturing expanded at a slower pace in the New York region in August. The Fed Bank of New York’s general economic index slipped to 8.2 from 9.5 in July. Readings greater than zero mean activity expanded in New York, northern New Jersey and southern Connecticut.

National benchmark indexes declined in all 14 western-European markets that opened today.

FTSE 100 6,483.34 -104.09 -1.58% CAC 40 4,093.2 -21.00 -0.51% DAX 8,376.29 -61.83 -0.73%

Zurich Insurance declined 3.6 percent to 243 Swiss francs after posting second-quarter net income of $789 million. That missed the $823.8 million average projection of analysts in a Bloomberg survey. The insurer said the floods in central Europe in May and June cost it $140 million.

H&M lost 1.6 percent to 242 kronor after saying same-store sales fell 1 percent in July from the same month a year earlier. The average estimate in an SME Direkt survey of analysts had called for an increase of 0.8 percent.

BG Group declined 2.5 percent to 1,176.5 pence as the Egyptian army continued its campaign to break up demonstrations against the removal of the country’s president. On July 26, Chief Executive Officer Chris Finlayson said “events in Egypt remain a primary concern and will continue to be so as the political, social and business environment evolves.

AstraZeneca (AZN) Plc dropped 1.7 percent to 3,192.5 pence and GlaxoSmithKline (GSK) Plc lost 1.4 percent to 1,657.5 pence as Morgan Stanley lowered its recommendation on both drugmakers to underweight, the equivalent of sell, from equal weight.

Oriflame Cosmetics SA slid 6.6 percent to 202.30 kronor, the lowest price this year, after reporting earnings before interest, taxes, depreciation and amortization of 42.2 million euros ($56 million) and sales of 360 million euros in the second quarter. Analysts on average had forecast Ebitda of 46.7 million euros and revenue of 367 million euros for the period.

Imperial Tobacco Group Plc climbed 2.6 percent to 2,209 pence as Europe’s second-biggest tobacco company said it plans to introduce an alternative to cigarettes next year. The product will provide a different way of taking nicotine.

U.S. stock-index futures dropped as an unexpected decline in jobless claims and a rise in the cost of living fueled speculation the Federal Reserve will reduce stimulus this year.

Global Stocks:

Nikkei  13,752.94 -297.22 -2.12%

Hang Seng 22,539.25 -1.88 -0.01%

Shanghai Composite 2,081.88 -18.26 -0.87%

FTSE  6,486.78 -100.65 -1.53%

CAC  4,084.83 -29.37 -0.71%

DAX 8,369.13 -68.99 -0.82%

Crude oil $107.44 +0.55%

Gold $1323.20 -0.76%

European stocks dropped from a 12-week high as companies from Zurich Insurance Group AG to Hennes & Mauritz AB fell after posting disappointing results.

The Stoxx Europe 600 Index slipped 0.6 percent to 306.87 at 8:48 a.m. in London. The equity benchmark rose to its highest level since May 22 yesterday as a report showed the euro area’s economy returned to growth in the three months through June after six consecutive quarters of contraction. It has still rallied 11 percent since reaching a low on June 24. Standard & Poor’s 500 Index futures retreated 0.2 percent today, while the MSCI Asia Pacific Index slipped 0.8 percent.

Zurich Insurance declined 2.9 percent to 244.70 Swiss francs after posting second-quarter net income of $789 million. That missed the $823.8 million average projection of analysts in a survey. The insurer said the floods in central Europe in May and June cost it $140 million.

Hennes & Mauritz lost 1.4 percent to 242.60 kronor after saying same-store sales fell 1 percent in July from the same month a year earlier. The average estimate in an SME Direkt survey of analysts had called for an increase of 0.8 percent.

Oriflame slid 4.6 percent to 206.50 kronor after reporting earnings before interest, taxes, depreciation and amortization of 42.2 million euros ($56 million) and sales of 360 million euros in the second quarter. Analysts on average had forecast Ebitda of 46.7 million euros and revenue of 367 million euros for the period.

FTSE 100 6,557.13 -30.30 -0.46%

CAC 40 4,105.79 -8.41 -0.20%

DAX 8,400.73 -37.39 -0.44%

Asian stocks fell, snapping the regional benchmark’s longest winning streak in six weeks, amid mixed corporate earnings across the region and after economists predicted the Federal Reserve will reduce stimulus next month.

Nikkei 225 13,752.94 -297.22 -2.12%

Hang Seng 22,494.53 -46.60 -0.21%

S&P/ASX 200 5,152.37 -5.05 -0.10%

Shanghai Composite 2,081.88 -18.26 -0.87%

Sony Corp., an electronics maker that gets 68 percent of sales overseas, slid 1.6 percent, pacing declines among Japanese exporters as the yen rose.

Thai Beverage Pcl., a brewer controlled by billionaire Charoen Sirivadhanabhakdi, sank 5.2 percent in Singapore after posting lower sales and profit.

Li & Fung Ltd., the world’s biggest supplier of toys and clothes to retailers including Wal-Mart Stores Inc., jumped 12 percent in Hong Kong after saying business is recovering.

Nikkei 225 14,050.16 183,16 1,32%

S & P / ASX 200 5,157.42 -0.28 -0.01%

Shanghai Composite -6,02 -0,29 2,100.14%

FTSE 100 6,587.43 -24.51 -0.37%

CAC 40 4,114.2 +21.70 +0.53%

DAX 8,438.12 +22.36 +0.27%  

Dow -113.66 15,337.35 -0.74%

Nasdaq -15.17 3,669.27 -0.41%

S&P -8.83 1,685.33 -0.52%