Stocks in Europe, Asia, U.S. Index Futures Slump; Dexia Falls

Stocks in Europe, Asia, U.S. Index Futures Slump; Dexia Falls

By Adria Cimino

Sept. 29 (Bloomberg) -- Stocks tumbled in Europe and Asia and U.S.
index futures retreated as bank bailouts accelerated and the $700
billion plan to rescue American financial institutions failed to
unlock money markets.

Dexia SA and Hypo Real Estate Holding AG sank as much as 76 percent in
Europe after the governments of Belgium, the Netherlands and
Luxembourg were forced to rescue Fortis and the U.K. seized Bradford &
Bingley Plc. Westpac Banking Corp., Australia's third-biggest bank,
slid 3.5 percent. Wachovia Corp., the sixth-largest U.S. bank by
assets, declined as much as 33 percent in Germany on increasing
speculation the company may be forced to seek a buyer or mortgage
partner.

Europe's Dow Jones Stoxx 600 Index decreased 2.8 percent to 258.50 at
9:19 a.m. in London. Futures on the Standard & Poor's 500 Index
dropped 2.1 percent following the measure's steepest weekly slump
since May. The MSCI Asia Pacific Index slid 2.7 percent today.

``There's more pain to come,'' said Andy Lynch, who manages about $3
billion at Schroder Investment Management Ltd. in London. ``People
knew the bailout was going to happen. Now it's back to the same-old,
same-old of capital writedowns and weekend bailouts. Earnings
estimates for next year still are too high.''

Profit Slump

Credit losses at UBS AG, along with profit declines at technology
companies such as Ericsson AB, helped send earnings lower at 153 of
the 332 members of the Stoxx 600 tracked by Bloomberg that reported
quarterly results since the beginning of July. More than 40 percent of
the Stoxx 600's companies trailed Wall Street's estimates, Bloomberg
data show.

The MSCI World Index has fallen 23 percent this year as banks
worldwide racked up more than $554 billion in credit losses and
writedowns, pushing the global economy toward a recession.

National benchmark indexes sank in all of the 17 western European
markets that were open. The U.K.'s FTSE 100 lost 2.7 percent.
Germany's DAX fell 2.9 percent and France's CAC 40 retreated 3.2
percent.

U.S. lawmakers reached agreement yesterday as House Republican leaders
backed away from opposition to the bank rescue proposal after it
included plans to create insurance for mortgage-backed securities. The
House and Senate are scheduled to vote on the bill early this week,
although it wasn't clear last night that it has sufficient votes to
pass the House.

Fortis, Dexia

Fortis lost 0.4 percent to 5.18 euros after the company received a
bailout of 11.2 billion euros ($16.3 billion). Belgium will buy 49
percent of Fortis's Belgian banking unit for 4.7 billion euros, while
the Netherlands will pay 4 billion euros for a similar stake in the
Dutch banking business, the governments said. Luxembourg will provide
a 2.5 billion-euro loan convertible into 49 percent of Fortis's
banking division in that country.

Dexia plunged 24 percent to 7.66 euros. The company may soon announce
a plan to raise capital in a bid to reassure markets, Le Figaro
newspaper, said without citing anyone. Dexia spokeswoman Ulrike Pommee
told Bloomberg News the bank held a board meeting last night to
discuss Fortis and the financial crisis. She declined to comment on
the report the bank may raise capital.

Bradford & Bingley

Bradford & Bingley, the U.K.'s largest lender to landlords, was seized
by the government after the credit crisis shut off funding and
competitors refused to buy mortgage loans that customers are
struggling to repay.

Banco Santander SA, Spain's biggest lender, will pay 612 million
pounds ($1.1 billion) to buy Bradford & Bingley branches and deposits,
the U.K. Treasury said today. Santander shares declined 2.8 percent to
10.61 euros.

Hypo Real Estate, Germany's second-largest commercial- property
lender, slumped as much as 76 percent to 3.30 euros. The bank said it
expects to scrap a 2008 dividend payment after securing a ``multi-
billion-euro'' credit line to shield itself from turmoil on financial
markets.

Westpac fell 3.5 percent to A$23.15.

Wachovia slid 33 percent to $6.74 in Germany. Three days after Chief
Executive Officer Robert Steel told employees Wachovia was ``strong
and performing well,'' the Wall Street Journal reported today that the
Charlotte, North Carolina-based bank was in advanced takeover talks
with Wells Fargo & Co. Citigroup Inc. also may make a bid, the paper
reported.

Commodities Producers

Basic-resource shares retreated as metals prices dropped in London.
BHP Billiton Ltd., the world's biggest mining company, lost 6.1
percent to 1,285 pence. Rio Tinto Group, the second-largest iron ore
exporter, retreated 5.8 percent to 3,490 pence. Copper, lead, nickel
and tin prices sank in London.

Renault SA, France's second-biggest carmaker, slipped 3.2 percent to
45.83 euros after Credit Suisse Group AG cut its recommendation on the
shares to ``underperform'' from ``outperform.''

Siemens AG fell 2.5 percent to 65.14 euros. Europe's largest
engineering company may face a ``certain slowdown'' in the growth of
its orders in the coming months as the economy falters, Les Echos
reported, citing Chief Executive Officer Peter Loescher.

To contact the reporter on this story: Adria Cimino in Paris at
acimino1@bloomberg.net.