Weak Data Send European Stocks Lower

European stock markets dropped on Thursday, following a raft of weak macroeconomic data, while investors also got jittery a day before a much anticipated speech by U.S. Federal Reserve Chairman Ben Bernanke.

The Stoxx Europe 600 index SXXP lost 0.6% to 265.57, after closing a second straight day in the red on Wednesday.

“There are concerns that we’re moving into a season of storms, and not just in relation to the weather, and markets are always more volatile in that period,” said Justin Urquhart Stewart, co-founder of Seven Investment Management.

“We can see that we have the German constitutional court decision, Dutch elections, the Jackson Hole meeting and the ECB meeting ahead of us, so there’s a series of potential mines that could go off,” he added. He stressed, however, that “we are seeing some fundamental changes since months ago,” when people feared Greece would exit the euro zone.

The world’s biggest advertising firm, WPP PLC, WPP posted one of the biggest losses in the pan-European index, off 3%, after cutting its revenue forecast for 2012 and reporting mixed first-half results. See: WPP cuts 2012 revenue forecast

Pointing in the other direction, French food retailer Carrefour SA CA jumped 7.6% as it narrowed its first-half loss from the year-ago-period, even as operating profit dropped because of pressure on key markets. See: Carrefour narrows loss ahead of turnaround plan

Bernanke

For the broader European stock markets, investors pulled out of equities as they awaited Bernanke’s Friday speech at the Jackson Hole, Wyo. meeting, where any comments about the economy and prospects of further stimulus will be scrutinized.

“Bernanke is not going to come out with any policy announcements yet. He has the ability to do much more quantitative easing than anyone else, because it’s a reserved currency, but he won’t do it until he necessarily has to,” Urquhart Stewart said.

“We will see some political changes being made before he commits more money,” he said.

Weak Japanese retail sales further added to market worries, underpinning concerns of slower global growth. See: Japan’s retail sales swing negative in July

Meanwhile in Europe, the number of unemployed Germans grew by a seasonally adjusted 9,000 in August, above analysts’ expectations of an 8,000 rise. See: German unemployment rises by 9,000 in August

The European Commission said its euro-zone economic-sentiment indicator fell to 86.1 in August from 87.9 in July, as all the sector indexes declined.

In Italy, stocks erased a loss after the Treasury succeeded in mostly lowering borrowing costs at 5- and 10-year bond auctions. See: Borrowing costs drop at Italian bond auction

The FTSE MIB index FTSEMIB was, however, 0.7% lower at 14,847.17.

Movers

Banks, which tend to be among the biggest decliners in a negative trading environment, saw broad-based losses on most European bourses.

In the U.K., HSBC Holdings PLC HSBA HBC5 lost 0.9% and Barclays PLC BARCBCS fell 1.5%.

The losses added pressure on the FTSE 100 index UKX, which slipped 0.2% to 5,730.25.

Miners were also on the decline, tracking losses for most metals. Rio Tinto PLC RIORIO RIO gave up 2.1% and BHP Billiton PLC BLTBHPBHP tripped 2.3%.

French stocks were mostly lower, with Pernod Ricard SA RI down 1.7%. The drinks company reported a 10% rise in full-year profit, but missed analysts’ expectations. See: Pernod Ricard net up; Daniele Ricard is chairwoman

The CAC 40 index PX1 fell 0.6% to 3,394.52.

Vivendi SA VIV rose 2.7% as the media and telecommunications firm reported adjusted earnings before interest and tax that beat analysts’ estimates. See: Vivendi profit dragged down by mobile phone unit

Among German stocks, car makers led declines. BMW AG BMW lost 3.2%, Daimler AG DAI gave up 3.8% and Volkswagen AG VOW VOW3  tripped 2.7%.

The DAX 30 index DAX traded 0.9% lower at 6,950.45.

Marketwatch