The Bovespa stock index fell for the first day in three sessions as economists cut their 2011 Brazil growth forecast for a fifth straight week.

Natura Cosmeticos SA, Brazil’s biggest cosmetics maker, tumbled the most in three weeks. Lojas Americanas SA led losses by retailers after a report showed Christmas sales slowed in Brazil from a year earlier.

Brazil’s benchmark equity gauge slid 0.1 percent to 57,669.48 at the close of trading in Sao Paulo. Thirty-one stocks advanced on the index, while 31 declined. The real weakened 0.1 percent to 1.8582 per U.S. dollar.

“The outlook for the economy isn’t very bright, as signs of a slowdown keep mounting,” Gustavo Mendonca, who helps oversee 250 million reais ($135 million) as an economist at Oren Investimentos, said by phone from Rio de Janeiro. “The holidays in Europe and in the U.S. reduced today’s trading volumes.”

Economists cut their forecast for economic growth this year to 2.9 percent, from 2.92 percent, according to the median forecast in a central bank survey of economists. Brazilian consumer prices will increase 5.33 percent next year, less than the 5.39 percent forecast the week earlier, today’s survey showed.

Sales

Brazil’s retail sales in the week before Christmas increased 2.8 percent from the year-earlier period, Serasa Experian said today in an e-mailed statement. In the same period last year, sales rose 16 percent from 2009, Serasa said.

Natura fell 1.4 percent to 36.13 reais. Lojas Americanas dropped 1.1 percent to 14.68 reais.

Traders moved 1.29 billion reais in stocks in Sao Paulo, data compiled by Bloomberg show. That compares with a daily average this year of 6.56 billion reais through Dec. 15, according to data from the exchange.

The Bovespa entered a bull market in October after gaining 22 percent from a two-year low on Aug. 8 as interest-rate cuts in Brazil and signs of progress in solving Europe’s debt crisis buoyed demand for equities. The measure is still down 17 percent this year on concern flagging global commodity demand and quickening inflation will hurt corporate earnings growth.

The index trades at 10.2 times analysts’ earnings estimates, in line with the ratio for MSCI Inc.’s measure of 21 developing nations’ equities, weekly data compiled by Bloomberg show.

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos in New York at papadopoulos@bloomberg.net

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