Bloomberg News

U.K. Stocks Are Little Changed as U.S. Jobs Data Offset Earnings

February 02, 2012

Feb. 2 (Bloomberg) -- U.K. stocks were little changed as a report showed that U.S. jobless claims fell more than forecast, offsetting declines in Unilever and AstraZeneca Plc that predicted a difficult year ahead for earnings.

Xstrata Plc jumped 9.9 percent after Glencore International Plc, the world’s largest listed commodity trader, started talks to buy the shares in Xstrata that it doesn’t already own. Unilever and AstraZeneca fell at least 3 percent.

The benchmark FTSE 100 Index rose less than 0.1 percent to 5,796.07 at the close in London, its highest level since July 29. Stocks yesterday climbed by the most since Jan. 3 as manufacturing gauges climbed from China to the U.S., adding to optimism that growth will boost company earnings. The broader FTSE All-Share Index added 0.2 percent today.

First-time applications for unemployment benefits in the U.S. fell by 12,000 to 367,000 in the week ended Jan. 28, down from from 377,000 the previous week, figures released by the Labor Department in Washington today showed. The median forecast of 46 economists in a Bloomberg News survey projected 371,000 new claims.

U.K. construction output slowed in January to the weakest in four months. A gauge of building activity based on a survey of purchasing managers fell to 51.4 from 53.2 in December, Markit Economics and the Chartered Institute of Purchasing and Supply in London said in a report.

Xstrata-Glencore Talks

Xstrata surged 9.9 percent to 1,230.5 pence. Glencore made an approach about an all-share offer, Zug, Switzerland-based Xstrata said. Glencore holds 34 percent and the rest of the company is valued at 21.9 billion pounds ($35 billion) based on yesterday’s closing price. Glencore said in a statement there’s no certainty of an offer.

Shares in Glencore advanced 6.9 percent to 461.7 pence.

Unilever fell 4.4 percent to 1,994 pence. The world’s second-largest consumer-goods maker reported fourth-quarter revenue growth that missed forecasts and said it expects difficult economic conditions to persist this year.

So-called underlying sales, which exclude acquisitions and currency fluctuations, rose 6.6 percent in the three months through December, the London- and Rotterdam-based company said today in a statement.

AstraZeneca dropped 3.4 percent to 2,984 pence after saying 2012 will be challenging for the industry. It’s guidance for this year was “disappointing,” according to Goldman Sachs Group Inc. analyst Keyur Parekh. The U.K.’s second-biggest drugmaker said profit this year will decline as the company prepares to face generic competition to top-selling medicines.

BP Plc, the second-biggest crude producer in Europe, slipped 1.1 percent to 479.9 pence.

--Editor: Srinivasan Sivabalan

To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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