Most European Stocks Drop Before U.S. Retail, Home Data

European stocks were little changed as investors awaited reports on U.S. retail and housing to gauge the health of the world's biggest economy before minutes from the latest Federal Reserve meeting. U.S. index futures were little changed, while Asian shares retreated.

Diageo Plc dropped 1.5 percent after Chief Executive Officer Ivan Menezes said uncertainties in the global economy will drag on sales growth.

The Stoxx Europe 600 Index added less than 0.1 percent to 322.64 at 8:44 a.m. in London. The benchmark gauge yesterday fell from a five-year high, trimming this year's gains to 15 percent. It is trading at 15.1 times projected earnings, near its highest level since the end of 2009 and more than the 10-year average of 12.1 times earnings, data compiled by Bloomberg show. Standard & Poor's 500 Index futures gained 0.1 percent, while the MSCI Asia Pacific Index slipped 0.5 percent.

"Recent market exuberance gives way to a little more temperance ahead of the release of the latest FOMC minutes from the October meeting as well as retail sales data," Michael Hewson, a market analyst at CMC Markets Plc in London, wrote in a note, referring to the Federal Open Market Committee. "While this week has got off to a fairly slow start, today's events could well prompt a strong response if markets get something they hadn't bargained for."

Economic Data

In the U.S., a report at 8:30 a.m. in Washington may show retail sales rose 0.1 percent in October, having dropped 0.1 percent a month earlier, economists forecast in a Bloomberg survey. A separate release will probably show sales of previously owned homes increased to a 5.14 million annual pace, from a 5.29 million rate a month earlier.

The Federal Reserve will release minutes of its October policy meeting after European markets close today. The document will reveal more details on the central bank's decision to maintain its pace of asset purchases at $85 billion a month. Fed policy makers will probably trim the bond-buying to $70 billion at their March 18-19 meeting, according to the median estimate in a Bloomberg survey.

Fed Chairman Ben S. Bernanke said late yesterday the central bank will probably maintain its target interest rate long after ending its monthly bond purchases.

"The target for the federal funds rate is likely to remain near zero for a considerable time after the asset purchases end, perhaps well after" the jobless rate breaches the Fed's 6.5 percent threshold, Bernanke said in a speech to economists in Washington.

Diageo Guidance

Diageo Plc lost 1.5 percent to 1,998.5 pence after Menezes told journalists yesterday he expects the "uncertain" global economy to continue to affect sales growth for the world's biggest distiller.

Menezes said the company was committed to its profitability target despite slowing growth in some economies. Diageo said in August 2011 it would increase organic sales by an average of 6 percent a year and widen its operating margin, a measure of profitability, by 200 basis points over three years.

Societe Television Francaise 1 rose 6.4 percent to 14.18 euros after France beat Ukraine to advance to the next year's soccer World Cup. TF1 yesterday fell as much as 1.3 percent in intraday trading as Natixis wrote in a note that the probability of the French national team qualifying for the tournament was "very low."