PARIS - Premier League title chasers Manchester City and Manchester United slumped to Europa League last 16 first-leg defeats on Thursday as Spain celebrated three wins out of three.
United were stunned 3-2 by Athletic Bilbao at Old Trafford, while City suffered a 1-0 defeat by Sporting Lisbon in Portugal.
Sir Alex Ferguson's United took a 22nd-minute lead through Wayne Rooney but Bilbao roared back with goals from Fernando Llorente, Oscar de Marcos and Iker Muniain.
Rooney reduced the damage ahead of next week's second leg with an injury-time penalty to keep alive United's hopes of making the quarter-finals.
"We were well beaten. Bilbao were the better side," admitted Ferguson. "Our defence wasn't very good tonight and we were on the back foot because of it. But we can win the second leg next week because we showed that we can create chances against them."
The loss extended United's home record in Europe this season to one win in five matches. City had crushed Portuguese league leaders Porto 6-1 on aggregate in the previous round, but Sporting proved a far more formidable obstacle at Lisbon's Jose Alvalade Stadium.
Brazilian centre-back Xandao claimed the game's only goal with a clever back-heel in the 51st minute to give Ricardo Sa Pinto's side a narrow advantage ahead of the second leg at the City of Manchester Stadium next week.
Victory extended Sporting's unbeaten European home record to 10 games, while City coach Roberto Mancini was left to rue an injury to captain Vincent Kompany that forced the Belgian centre-back to leave the fray early in the game.
Mancini said later that Kompany, who has a calf strain, will now miss the weekend trip to Swansea City, the second leg against Sporting and possibly the home game with Chelsea.
"I don't think Sporting had a lot of chances to score," said Mancini. "We played slow sometimes because we found 10 players behind the ball. We had more chances to score than Sporting, though we did not underestimate them.
"We have another game and we have more chances to win the next game and I think we will progress in this competition."
Bilbao were joined in the Spanish winners' enclosure by 2010 champions Atletico Madrid and Valencia.
Atletico saw off Besiktas of Turkey 3-1 with all of the home team's goals coming in the first half.
But a second-half strike by Portuguese international Simao, who spent three seasons at Atletico before moving to Turkey last year, gave Besiktas hope of over-turning the deficit in the second leg.
Atletico scored twice in three minutes through Eduardo Salvio in the 24th and 27th minutes, with Adrian Lopez adding a fine solo effort for a third, eight minutes before the break.
However, 32-year-old Simao struck a crucial 53rd-minute volley for the visitors to keep their hopes alive.
Valencia saw off PSV Eindhoven 4-2 but will be disappointed to have allowed the Dutch side to score twice in the last seven minutes.
Valencia were 2-0 up inside 13 minutes thanks to goals from Victor Ruiz and Roberto Soldado.
Soldado added a penalty just before the break, with Pablo Piatti making it 4-0 by the 56th minute.
But an 83rd-minute penalty from Ola Toivonen and an injury-time strike from Georginio Wijnaldum gave PSV hope of staying in the tournament.
FC Twente, managed by former England manager Steve McClaren, clinched a 1-0 home win against Schalke of Germany thanks to a 61st-minute penalty from Luuk de Jong, who had been brought down by Joel Matip.