Stocks fall in Europe, Asia after reports

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By Adria Cimino, BLOOMBERG NEWS

Stocks fell in Europe and Asia on Friday, extending the MSCI World Index's longest weekly losing streak since March, as reports on retail sales and the service industry added to concern that the first global recession since World War II will persist. U.S. markets were closed in observance of Independence Day.

Metro AG, Germany's biggest retailer, slipped 2.5 percent as European retail sales dropped more than economists had estimated. Seven & I Holdings Co., Japan's largest retailer, sank 5 percent after revealing profits plunged 28 percent. Teck Resources Ltd. surged 8.1 percent in Toronto, leading Canadian stocks higher, after the company sold a stake to China's sovereign wealth fund.

The MSCI World Index lost 0.1 percent, dropping to to 946.80 at 4:35 p.m. in New York as 12 stocks fell for every seven that rose. The gauge of 1,654 companies in 23 developed nations slipped 1.8 percent this week as the U.S. lost more jobs than projected.

"People realize the economy isn't as bright as expected," said Franz Wenzel, deputy director of investment strategy at Axa Investment Managers in Paris, which oversees $678 billion. "Over the next couple of weeks or even months, the stock market will trade sideways at best."

Europe's Dow Jones Stoxx 600 Index fell less than 0.1 percent as eight stocks declined for every five that advanced. The measure has slipped 5 percent since June 11 on speculation that share prices have outpaced the outlook for economic growth after a three-month rally pushed valuations to 25.6 times earnings, the highest level since 2004.

The MSCI Asia Pacific Index declined 0.2 percent, leaving it with a drop of 0.8 percent since June 26. The Standard & Poor's 500 Index tumbled 2.5 percent this week. U.S. stock and bond markets were closed for Independence Day.

Canada's S&P/TSX Composite Index climbed 0.4 percent as raw-material producers advanced, trimming its weekly drop to 1 percent.

The dollar posted a weekly gain against the euro as speculation that the economic recovery is faltering boosted demand for the safety of the U.S. currency. The pound fell against the dollar, declining for the first week in a month, after a report showed Britain's service industries were little changed in June as the recession persisted.

In limited electronic trading on the New York Mercantile Exchange, crude oil fell below $66 a barrel, a 10 percent decline from this year's high, marking a market "correction."

Prices might drop again next week on speculation U.S. fuel inventories will climb as the weak economy curbs demand, according to a Bloomberg News survey of analysts.

"It has been a double whammy for crude oil," said Chris Jarvis, president of Caprock Risk Management LLC in Hampton Falls, N.H. "You've got a stronger dollar and weaker-than-expected economic data, so that was a huge catalyst to start selling crude."

Crude oil for August delivery fell $1.10, or 1.7 percent, to $65.63 a barrel. Oil reached a year-to-date high of $73.38 on June 30.