Bloomberg News

U.K. Stocks Drop as U.S. Jobs Report Misses Estimates

July 06, 2012

U.K. stocks dropped from a two-month high as a report showed that the U.S. economy added fewer jobs last month than economists had estimated.

Rio Tinto Group declined 2.8 percent as commodity producers retreated. Aviva Plc (AV/) rose 1.2 percent after selling more shares in Delta Lloyd NV than previously planned.

The FTSE 100 Index (UKX) lost 30 points, or 0.5 percent, to 5,662.63 at the close in London. The gauge has still added 1.7 percent this week, its biggest weekly gain since the beginning of June as the Bank of England increased its bond-buying program and surveys of manufacturing in economies from China to the euro area beat economists’ estimates. The broader FTSE All-Share Index also dropped 0.5 percent today, while Ireland’s ISEQ Index slipped 1.6 percent.

“The U.S. numbers are disappointing, not just at the headline level, but also at the private employment level,” said Gerard Lane, a strategist at Shore Capital Group Ltd. in Liverpool, England. “The news is not bad enough to lead to quantitative easing, and it’s not good news.”

A U.S. Labor Department report today showed that employers in the world’s largest economy hired fewer workers in June than economists had forecast. Payrolls rose 80,000 last month after increasing a revised 77,000 in May, the release showed. Economists had projected a 100,000 gain, according to the median estimate in a Bloomberg News survey. The unemployment rate remained at 8.2 percent.

German industrial output increased 1.6 percent in May, according to a report from the country’s Economy Ministry in Berlin. Economists had forecast production would climb 0.2 percent. The measure dropped 2.1 percent in April.

Spanish Production

In Spain, a report from the National Statistics Institute in Madrid showed that industrial production dropped for a ninth month in May, slumping 6.1 percent from a year earlier. The average estimate of seven economists surveyed by Bloomberg had called for an 8.1 percent contraction.

A gauge of mining shares listed on the FTSE 350 Index dropped 2.2 percent today. Rio Tinto, the world’s third-biggest commodity producer, lost 2.8 percent to 3,069 pence and Petropavlovsk Plc (POG) slipped 3.9 percent to 458.8 pence.

Marks & Spencer Plc declined 3.4 percent to 318 pence after the Financial Times said the clothing retailer will report its worst quarterly trading in three years.

Aviva rose 1.2 percent to 288 pence after the U.K.’s second-biggest insurer by market value sold 37 million shares in Delta Lloyd. The company originally planned to sell 25 million. It increased the size of the sale because of greater-than- expected demanded from investors.

Centrica Plc (CNA) gained 1.2 percent to 319.1 pence after winning approval for a 580-megawatt wind farm off the coast of Lincolnshire and north Norfolk.

To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net

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


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus