Bloomberg News

U.K. Stocks Are Little Changed Amid U.S. Budget Talks

December 20, 2012

U.K. stocks closed little changed near a nine-month high as U.S. lawmakers continued talks to avoid fiscal changes that may lead to a recession in the world’s largest economy.

Carnival Corp. (CCL:US) dropped the most in 11 months in London trading after making 2013 earnings forecasts that were below analyst estimates. Weir Group Plc (WEIR) rallied 2.8 percent after it agreed to buy Mathena Inc. for as much as $385 million.

The FTSE 100 (UKX) slipped 3.25 points, less than 0.1 percent, to 5,958.34 in London. The gauge advanced to a nine-month high yesterday as German business confidence increased more than forecast. The broader FTSE All-Share Index fell less than 0.1 percent. Ireland’s ISEQ Index climbed 0.6 percent.

“The increasing vitriol in Washington appears to not faze markets seemingly to the extent I think it should,” said Gerard Lane, a strategist at Shore Capital Group Ltd., an investment bank and stockbroker in Liverpool.

White House officials told a group of business leaders that President Barack Obama’s talks with House Speaker John Boehner for a budget deal had stalled, a person familiar with the negotiations said.

The officials said that Republican plans to move forward with Boehner’s proposal on taxes and spending may push the government past the year-end deadline, according to the person, who asked for anonymity because the talks are private.

Fiscal Cliff

If lawmakers fail to reach an agreement, the $607-billion package of automatic tax increases and spending cuts will come into force in January.

U.S. Labor Department data showed first-time applications for jobless benefits in the world’s largest economy rose to 361,000 last week from 343,000 the previous week. Economists forecast 360,000 claims, according to the Bloomberg survey median.

Another report showed the index of leading economic indicators fell in November. The Conference Board’s gauge of the outlook for the next three to six months dropped 0.2 percent after a 0.2 percent gain in October.

In the U.K., a report showed retail sales failed to increase last month as demand at department stores slumped the most in almost two years.

Sales including fuel were unchanged from October, the Office for National Statistics said. That missed the median forecast for a 0.4 percent increase in a Bloomberg survey.

Carnival Sinks

Carnival, the world’s biggest cruise-line operator, tumbled 6.1 percent to 2,391 pence in London after providing a full-year earnings forecast that fell short of what analysts anticipated. The company said it sees 2013 adjusted earnings per share in the range of $2.20 to $2.40, lower than the estimate of $2.46.

Evraz Plc (EVR), the Russian steelmaker partly owned by billionaire Roman Abramovich, led European commodity producers lower, falling 4.1 percent to 267 pence, snapping four days of gains.

Weir Group gained 2.8 percent to 1,863 pence, for the biggest jump this month. The world’s largest provider of pumps to mining companies said it will buy closely held Mathena, a maker of pressure-control products for shale drilling, for an initial payment of $240 million and profit-linked payments of $145 million over two years.

Centamin Plc (CEY) rose 3 percent to 42.71 pence after the gold producer said production restarted at its Sukari mine in Egypt.

GKN Plc (GKN), the British maker of car drive shafts, added 1 percent to 229.3 pence. The stock was raised to buy from neutral at Citigroup Inc.

Vesuvius Plc (VSVS), the world’s largest supplier of high- temperature ceramics for steelmakers, surged 8.6 percent to 352 pence as analysts and investors tried to settle on a fair valuation for the former Cookson Plc unit following a split-up.

To contact the reporter on this story: Tom Stoukas in Athens at astoukas@bloomberg.net

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


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Companies Mentioned

  • CCL
    (Carnival Corp)
    • $37.85 USD
    • 0.09
    • 0.24%
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