The euro slid as the region's recession deepened more than forecast, while stocks were little changed as global economic concerns overshadowed a drop in US jobless claims and a $US23 billion buyout offer for HJ Heinz Co.

Europe's 17-nation currency depreciated 0.8 per cent versus the dollar at 1:37 p.m. in New York. The S&P 500 was little changed, a day after the US benchmark climbed to the highest since October 2007, while the Stoxx Europe 600 Index slipped 0.2 per cent. German 10-year bund yields dropped three basis points to 1.64 per cent. Japan's Nikkei 225 Stock Average rose 0.5 per cent, and Hong Kong's Hang Seng Index climbed 0.9 per cent after the market reopened following the Lunar New Year holiday.

Gross domestic product in the euro area fell 0.6 per cent in the fourth quarter from the previous three months, the worst performance since the first quarter of 2009. Japanese GDP declined for a third straight quarter, stoking speculation Prime Minister Shinzo Abe will step up efforts to end deflation.

"They're pretty awful figures," said Neil Mellor, a foreign-exchange strategist at Bank of New York Mellon Corp. in London. "It could get a lot worse because the euro has risen a long way since the start of the fourth quarter. While the Japanese are doing what they're doing, you can't refute the fact that people will buy the euro on dips."

European Currencies

Europe's shared currency weakened against all 16 major peers. Earlier reports showed Germany's economy, the largest in Europe, contracted 0.6 per cent last quarter, and French GDP dropped 0.3 per cent. The currencies of euro-area neighbors also declined, with the zloty, Swedish krona and Norwegian krone sliding versus the dollar.

Hungary's forint snapped five days of gains, dropping 0.6 per cent per euro, after data from the statistics office in Budapest showed GDP tumbled the most in three years. Japan's yen was stronger against 15 of 16 major peers.

The Group of 20 nations said that it recognizes global economic growth is still weak, that stronger economic and monetary union is needed in the euro area and Japan and the US need to resolve fiscal uncertainties, according to a draft of a statement prepared for a meeting of finance ministers and central bank governors in Moscow this week.

In the US, fewer Americans than projected filed applications for unemployment benefits last week, Labor Department data showed, while Warren Buffett's Berkshire Hathaway Inc. and 3G Capital agreed to buy Heinz.

Heinz Jumps

HJ Heinz surged 20 per cent, the most since at least 1980, to $US72.30. Berkshire and 3G will pay $US72.50 a share, compared with yesterday's closing price of $US60.48, according to a statement today. Berkshire will spend about $US12 billion to $US13 billion on the deal for the maker of condiments and Ore-Ida potato snacks, Buffett told CNBC. The deal will also be financed with cash from 3G affiliates, plus the rollover of existing debt, and is valued at about $US28 billion including debt, according to the statement.

Cisco Systems Inc. slipped 1 per cent as the largest maker of computer-networking gear forecast sales this quarter that missed analysts' most optimistic projections. US Airways Group Inc. slipped 6.8 per cent after agreeing to an $US11 billion merger with AMR Corp.'s American Airlines.

About $US145.8 billion of deals have been announced in the US this year, according to data compiled by Bloomberg. That already surpassed the total of $US99.6 billion during the first two months of last year.

'Positive' on M&A

"We're positive on the fact that M&A will continue to move higher," Jeff Morris, the Boston-based head of US equities for Standard Life Investments, said in a phone interview. His firm oversees $US263 billion in assets. "If we can get some clarity in Washington and if the economy continues to grow, I think you'll see more and more companies use M&A."

The S&P 500 closed at the highest level since October 2007 yesterday, and is within 3 per cent of its record reached that month. Jobless claims decreased by 27,000, the most in a month, to 341,000 in the week ended Feb. 9, Labor Department figures showed today in Washington. The level of filings was lower than any projection in a Bloomberg survey in which the median forecast was 360,000.

US Bonds

US 30-year bonds rose, with the yield six basis points lower at 3.20 per cent, as the euro area's recession supported demand at a $US16 billion auction of the securities.

Two shares fell for every one that gained in the Stoxx 600 as gauges of chemical and telephone companies led losses.

Nestle SA fell 2.3 per cent, the most in four months, after the biggest food company reported the slowest sales growth in three years. Renault SA surged 7.7 per cent as France's second- largest carmaker reported better-than-expected operating profit and eliminated debt in its automotive division.

Anheuser-Busch InBev NV jumped 5.9 per cent in Brussels after agreeing to sell its brewery in Piedras Negras and grant perpetual rights for the Corona and Modelo brands in the US to Constellation Brands Inc. for $US2.9 billion. ABB Ltd., the world's largest maker of power transformers, advanced 5.6 per cent in Zurich after reporting better-than-estimated earnings.

The MSCI Emerging Markets Index was little changed as declines in Europe, the Middle East and Africa offset gains in Asia. Benchmark gauges in Russia, Turkey, Poland, Hungary and the Czech Republic sank at least 0.4 per cent.

The Hang Seng China Enterprises Index of mainland companies climbed 1.4 per cent on the first day of trading this week. People's Insurance Co., New China Life Insurance Co. and Greentown China Holdings Ltd. rose after MSCI Inc. said it will add the stocks to its China index.

India's Sensex gauge slid 0.6 per cent as a report showed the inflation rate dropped to lowest in more than three years.

BLOOMBERG