Manpower also reported lower quarterly earnings, but still topped expectations, and gave a disappointing forecast for the current period.

Chief Executive Jeff Joerres said on a conference call that its business in Germany, Italy and Spain was soft. "We do believe we will see further softening in Europe in the third quarter," he said.

Joerres said smaller countries like Belgium and Israel were offsetting some of the weakness, "giving us a much better glide path as we go into a potentially slower period."

He said the company did not see the U.S. market gaining any strength in the near future. Milwaukee-based Manpower generates the bulk of its business in Europe.

Second-quarter net income fell 33 percent to $107.4 million, or $1.34 per share, from $160.4 million, or $1.86 per share, a year earlier, when the company booked a large tax benefit.

Stripping out one-time items, Manpower earned $1.52 per share, 2 cents better than the analysts' average target, according to Reuters Estimates.

Revenue rose 17 percent to $5.905 billion, compared with Wall Street expectations of $5.95 billion.

Manpower expects third-quarter earnings of $1.45 to $1.49 per share, below Wall Street estimates of $1.58.

"We expect the stock to give back most of its recent gains leading up to this report," BMO Capital Markets analyst Jeff Silber said in a research note.

Manpower shares fell $6.26 to $49.87 on the New York Stock Exchange, surrendering most of this week's gains.

The stock is down about 46 percent over the past year, slightly lagging the performance of the wider employment sector, as measured by the S&P HR Employment Services index <.GSPEMPL>.

Most other U.S. staffing stocks, including Robert Half International Inc , Hudson Highland Corp and Spherion Corp were also lower. Swiss-based Adecco SA fell 2 percent in European trading.

(Reporting by Nick Zieminski; Editing by Lisa Von Ahn/Jeffrey Benkoe)