U.S. and European stocks fell yesterday as American retail sales unexpectedly decreased in April, the Bank of England said the U.K. economy faces a slow recovery and companies from ING Groep NV to Applied Materials Inc. posted losses. Treasuries rose, while copper tumbled for a fifth day. The 0.4 percent decrease in retail sales followed a revised 1.3 percent drop in March that was larger than previously estimated. Excluding auto dealers, sales fell 0.5 percent. Walt Disney Co., Fortune Brands Inc. and Best Buy Co. slid after the government said purchases at U.S. stores dropped 0.4 percent last month.

Earnings per share shrank 37 percent on average for the 435 companies in the S&P 500 that reported first?quarter results since April 7, according to data compiled by Bloomberg. The quarter is poised to be the seventh consecutive period of declining profits, the longest streak on record.

The U.S.’s AAA debt rating may be cut because the government can’t control spending, David Walker, chief of the Peter G. Peterson Foundation and former U.S. comptroller general, wrote in the Financial Times newspaper.

Alcoa Inc., the largest U.S. aluminum producer, tumbled 8.8 percent to $8.63. China, the world’s largest aluminum producer, may have restarted as much as 1.4 million metric tons of capacity in April, according to an analyst at Aluminum Corp. of China Ltd. Alcoa said earlier this week that there is still “significant oversupply” of the metal.

Asian stocks fell as an unexpected drop in U.S. retail sales and a decline in commodity prices dimmed the earnings outlook for electronics and metals producers. New orders for Chinese shipbuilders fell 95 percent from a year earlier during the first four months this year to 990,000 dead weight tons.

Japan’s economy shrank by a record last quarter amid an unprecedented collapse in exports and a drawdown of inventories that could pave the way for a recovery later this year, a report next week may show. Gross domestic product contracted an annualized 16.1 percent in the three months ended March 31, following a fourthquarter drop of 12.1 percent, according to the median estimate of economists surveyed by Bloomberg News. The Cabinet Office will release the GDP report on May 20 at 8:50 a.m. in Tokyo.

Indian market is expected to open down and will continue to trade lower during the day.