DaimlerChrysler and ING led a slide by companies that rely on the US for sales.

"The dollar's decline is a pretty big factor and is a negative for the market, " said Job Curtis at Henderson Global Investors in London. "A lot of companies generate a signi"cant amount of pro"t in dollars."

Royal BAM Group lost more than any other stock after the biggest Dutch builder cut its fullyear forecast. Credit Agricole was Europe's third-worst performer, falling after France's second-largest bank by assets posted its smallest quarterly pro"t increase in almost three years.

The Dow Jones Stoxx 600 Index lost 0.6% to 355.98 last week. That was the worst performance since the week ended 8 September. The Stoxx 50 declined 1.1%, while the Euro Stoxx 50, a gauge for the 12 nations using the euro, fell 0.8%.

Speculation that mergers and acquisitions will increase limited the losses. London Stock Exchange led European exchange operators higher after Nasdaq renewed its bid for the company.

The dollar slid to $1.3082 against the euro, the lowest in 19 months, and to $1.9308 versus the pound, its weakest against the British currency in almost two years. It also slumped against the Swiss franc and other European currencies.

A weaker dollar makes European goods more expensive for consumers in the world's biggest economy, and reduces the value of earnings in the US currency when repatriated to Europe.

The dollar's decline "is very bad news for most large companies in Europe", said Jacques Porta at O"valmo Patrimoine in Paris. "It is a region that's highly dependent on exports."

DaimlerChrysler, the German carmaker that gets about 45% of sales in the US, dropped 3.4% on the week. BMW, the world's largest maker of luxury cars, slid 3.5%. North America accounts for a quarter of its sales.

ING, the biggest Dutch "nancial-services company, which depends on the Americas for about 40% of its revenue, dropped 3.8%.

GlaxoSmithKline slid 2.6%.

Europe's largest drugmaker generates almost half of its sales in the US.

Royal BAM slumped 14%. The Dutch builder cut its annual pro"t forecast and suspended managers at a German construction unit after costs soared and unpro"table projects added to losses.

Credit Agricole, France's second-largest bank by assets, dropped 6.9% after the bank posted a 12% rise in third-quarter pro"t, its smallest in almost three years. Citigroup lowered its recommendation on the stock to "sell" from "hold".

London Stock Exchange surged 8.5% after Nasdaq made its second bid for the bourse this year. The offer values the London exchange at about £2.7bn ( 4bn). Euronext, Europe's second-largest stock exchange, soared 9.7%. The bourse has set a date for shareholders to vote on a $15bn takeover offer from NYSE Group, which last week moved closer to acquiring Euronext after Deutsche Boerse scrapped its bid for the Paris-based market.

Deutsche Boerse, operator of the Frankfurt Exchange, surged 10%.