First they came for Reykjavik, then Dublin, then Athens, now Rome......

[marmar]

(Bloomberg) European stocks fell for a second day as concern grew that the region’s debt crisis will spread to Italy and China’s inflation surged to a three-year high. Asian shares and U.S. index futures slid.

Intesa Sanpaolo SpA (ISP) retreated as Italy’s second-biggest bank was downgraded at HSBC Holdings Plc. British Sky Broadcasting Group Plc (BSY) tumbled to an eight-month low as U.K. Culture Secretary Jeremy Hunt was said to be preparing to ask regulators for additional advice on News Corp.’s proposed takeover. Northumbrian Water Group Plc (NWG) jumped 5.1 percent after receiving a 2.4 billion-pound ($3.8 billion) bid.

The Stoxx Europe 600 Index fell 0.6 percent to 272.03 at 11:31 a.m. in London. The gauge slipped 0.4 percent last week as speculation increased that the region’s debt crisis will spread and a report showed U.S. employers added fewer workers than forecast, fueling speculation the economic recovery is slowing. The measure has fallen for 9 weeks out of the past 10, bringing its drop since this year’s high on Feb. 17 to 6.6 percent.

“What we’re seeing today is the result of 20 to 30 years of Western countries living beyond their means,” said Matthieu Giuliani, a fund manager at Palatine Asset Management in Paris, which oversees $5 billion. “We pulled on the thread a bit and everyone is naked underneath. I’m cautious on stocks. Emerging markets were the final motor. If we have to slow down that machine, that motor will be removed.” .............(more)

The complete piece is at: http://www.bloomberg.com/news/2011-07-11/european-stock-index-futures-drop-on-italy-debt-concern-china-inflation.html