European Stocks Fall; Rio Tinto, Barclays, Dexia Pace Retreat

European stocks declined, following slumps in U.S. and Asian markets. Rio Tinto Group led mining shares lower as copper slid and the Wall Street Journal said the company may make a counter-bid for BHP Billiton Ltd.

Barclays Plc dropped after Fitch Ratings said the U.K. lender may have its debt rating cut. Dexia SA, a Belgian bank, fell after reporting profit decreased more than analysts estimated.

The Dow Jones Stoxx 600 Index lost 0.8 percent to 363.01 as of 8:20 a.m. in London, extending its decline this week to 1.2 percent. The Stoxx 50 also fell 0.8 percent, as did the Euro Stoxx 50, a measure for the euro region.

European stocks are heading for the third straight weekly drop, the longest losing streak since August, on concern that losses related to subprime mortgages in the U.S. will spread. The Stoxx 600, which has advanced in 14 of the last 15 fourth quarters, is down 3.9 percent since the start of October.

``We are going to see further defaults'' from banks, said Jane Coffey, head of equities at Royal London Asset Management, where she helps oversee about $14 billion. ``It's going to be a long hard slog. People are not convinced that we have seen the worst of it yet.''

U.S. stocks fell yesterday after Wells Fargo & Co. said home- equity losses will remain ``elevated'' through 2008 and on speculation Fannie Mae hid credit-market losses in its latest earnings report. Asian shares sank today after the Bank of Japan said growth could be threatened if the U.S. housing slump spreads.

Rio Tinto, Barclays

Rio Tinto, the world's third-largest mining company, dropped 3 percent to 5,260 pence as copper futures on the Shanghai Futures Exchange slumped by their daily limit. Anglo American Plc, the world's second-biggest mining company, lost 1.6 percent to 3,166 pence.

Separately, the Wall Street Journal said Rio Tinto may make a counter-bid for its larger rival BHP as a defense against a hostile takeover, citing people it didn't identify.

Rio Tinto is planning how to repel BHP's proposed all-stock acquisition and will outline the strategy at an investor meeting Nov. 26, the Journal said. Ian Head, a spokesman for London-based Rio Tinto, declined to comment today when contacted in Melbourne. Samantha Evans, a spokeswoman for Melbourne-based BHP, also declined to comment.

Barclays fell 1.7 percent to 521.5 pence as Fitch said the bank may have its debt rating cut after the U.K.'s third-biggest bank wrote down about 1.3 billion pounds ($2.7 billion) of credit-related securities.

The agency left Barclays's rating unchanged at AA+, the second-highest of 10 possible investment grades, while revising the bank's outlook to negative because of ``concerns that the continuing expansion of Barclays Capital might expose the group to greater risks and earnings volatility.''
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