Greece pulls European stocks down

European stocks slumped as Greece's risk of default was raised to 50 per cent by Moody's Investors Service and amid concern that the global economic recovery is faltering. Asian shares also fell and US index futures rose. BHP Billiton Ltd. and Rio Tinto Group both declined more than 2 per cent as metal prices retreated. Kingfisher Plc, Britain's biggest home-improvement retailer, fell 1.8 per cent as profit missed estimates. The Stoxx Europe 600 Index sank 0.8 per cent to 276.15 in London. The MSCI Asia Pacific Index retreated 1.6 per cent. European markets including Switzerland, Austria and Sweden were closed yesterday for the Ascension Day holiday. Standard & Poor's 500 Index futures expiring this month rose 0.2 per cent. "Traders are on guard for more weak data," said Jonathan Sudaria, a trader at London Capital Group Holdings Plc. "The recent pattern of poor economic data is beginning to fuel speculation that the global recovery has lost momentum and could start going into reverse, causing traders to flee risky assets." US stocks fell to lows of the day on Wednesday after the close of European markets, with the S&P 500 posting its biggest decline since August, as manufacturing expanded at the slowest pace in more than a year and employers hired fewer workers than forecast. This comes before today's monthly government payroll report that may show a fall in the number of people hired. Stocks maintained losses yesterday after a Labour Department weekly report showed more Americans than forecast filed applications for unemployment benefits last week, signalling the labour market is struggling to pick up. Jobless claims fell by 6,000 to 422,000 in the week ended May 28, Labour Department figures showed yesterday in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 417,000, according to the median forecast. The number of people on unemployment benefit rolls and those receiving extended payments decreased. Moody's downgraded Greece to Caa1 from B1, putting it on a par with Cuba, according to a report published late Wednesday. The move came after policymakers considered asking investors to reinvest in new Greek debt when existing bonds mature.