European Airline, Retail Stocks Fall; BP Shares Rise (Correct)

(Corrects to fix headline with dropped word.)

Oct. 5 (Bloomberg) -- European travel and retail stocks fell, paced by Air France SA and Carrefour SA, as crude oil rose to a record and renewed concern about rising energy costs. BP Plc and OMV AG paced gains by oil producers.

``All oil users will be penalized,'' said Thierry Girardet, who helps manage $123 million at Fival SA in Paris. ``It's like an additional tax for consumers, and it's more expensive to make planes fly.''

STMicroelectronics NV paced a drop by chipmakers after Advanced Micro Devices Inc.'s semiconductor sales missed an earlier forecast. BHP Billiton rose after it agreed to buy back stock.

The Dow Jones Stoxx 600 Index fell less than 0.1 percent to 244.09 as of 2:46 p.m. in London, with six of 18 industry groups rising and 12 falling. The Stoxx 50 advanced 0.1 percent, with almost three stocks rising for every two that fell. The Euro Stoxx 50, a measure for the 12 countries using the euro, fell 0.1 percent.

Crude reached $50 in New York for the first time last week as violence in Nigeria and hurricanes in the U.S. Gulf of Mexico lowered supply.

Benchmark indexes rose in 10 of 18 Western European markets. France's CAC 40 Index fell 0.3 percent, Germany's DAX Index gained 0.1 percent and the U.K.'s FTSE 100 Index climbed 0.3 percent. September futures on the Euro Stoxx 50 decreased 0.3 percent.

Air France Falls, BP Gains

Air France, Europe's biggest carrier, lost 1.2 percent to 13.07 euros. Deutsche Lufthansa, Europe's third-largest airline, slid 1.3 percent to 9.77 euros.

Crude oil for November delivery reached $50.91 a barrel in after-hours electronic trading on the New York Mercantile Exchange, surpassing its Sept. 28 intraday record of $50.47.

The U.S. government said production in the Gulf of Mexico took longer than expected to recover, slowing the buildup of inventories to meet winter needs. Crude was 1.5 percent higher at $50.65 as of 1:33 p.m. London time.

BP added 1.5 percent to 542.5 pence. The shares were raised to ``overweight'' from ``equal-weight'' at Morgan Stanley, which also raised its 2005 price estimate for Brent crude by 38 percent.

BP yesterday signaled profit rose in the third quarter because of record crude prices. Oil and gas shares were the biggest gainers among the 18 industry groups on the Stoxx 600, advancing 0.5 percent.

OMV added 1 percent to 196.94 euros as Erste Bank raised 2004 and 2005 earnings-per-share estimates for Austria's biggest oil company. Spain's Compania Espanola de Petroleos SA, or Cepsa, added 1.2 percent to 29.70 euros.

Carrefour Falls

Carrefour, Europe's biggest retailer, slid 3.1 percent to 37.08 euros. A report in Le Figaro newspaper said sales at France's hypermarkets and supermarkets slid in August and September.

Casino Guichard-Perrachon SA fell 1.7 percent to 61.45 euros. France's fifth-largest supermarket operator was downgraded to ``hold'' from ``buy'' by Guy Francheteau, an analyst at Fideuram Wargny. He cut the shares ``as a consequence of competitive tension in the industry.''

Retail shares were the largest decliners as a group in the Stoxx 600, losing 1 percent.

Technology Shares

Technology shares such as STMicroelectronics NV fell after Advanced Micro Devices Inc. reported chip sales that missed an earlier forecast.

STMicroelectronics, Europe's biggest chipmaker, lost 1.6 percent to 14.57 euros. ASML Holding NV, Europe's largest maker of semiconductor equipment, shed 1.2 percent to 11.06 euros.

Advanced Micro, the world's No. 2 maker of chips for personal computers behind Intel Corp., cited ``softness'' in the flash memory market as it reported falling third-quarter sales.

``It is definitely not the moment to get into technology,'' said Anna Escoriza, chief investment officer of BIBM Asset Management in Andorra, which oversees $3.6 billion. ``The semiconductor business is losing the growth profile it had a few years ago.''

BHP, Rio Tinto

BHP Billiton advanced 1.6 percent to 595 pence in London. The biggest mining company said it will buy back as much as A$1.5 billion ($1.1 billion) of its Australian stock, part of a plan to return profit from soaring commodity prices to investors.

Rio Tinto Group, the world's third-biggest miner, gained 0.6 percent to 1,509 pence. Sumitomo Metal Industries Ltd., Japan's No. 3 steelmaker, said it will buy 23 percent more iron ore a year from Rio Tinto and Brazil's Vale do Rio Doce, agreeing to longer terms to secure supplies.

Lastminute.com Plc, an unprofitable U.K. travel company, shed 3.2 percent to 129.75 pence. The company may eliminate more jobs by December as it seeks to trim 13 million pounds ($23.2 million) of costs by 2005, Chief Operating Officer Ian McCaig said.

To contact the reporter on this story: Brian McGee in London at bmcgee3@bloomberg.net.

Last Updated: October 5, 2004 10:05 EDT