European stocks declined as an unexpected increase in U.S. jobless claims offset better-than-estimated earnings from Nokian Renkaat Oyj and Aviva Plc.
Unilever, the world’s second-largest maker of consumer goods, declined 5.2 percent as sales missed estimates. Barclays Plc slid 4.7 percent. Nokian Renkaat, the Nordic region’s largest tire maker, rallied 7.2 percent after posting better-than-estimated earnings. Aviva, the U.K.’s second-biggest insurer, surged 7.2 percent as first-half profit increased 21 percent.
The benchmark Stoxx Europe 600 Index dropped 0.3 percent to 261.48 as the 4:30 p.m. close in London. The gauge has advanced 13 percent from this year’s low on May 25 as concern eased that Europe’s sovereign debt crisis may derail the economic recovery. More than 25 companies in the Stoxx 600 reported results today.
“It’s clear that the earnings season has come in fairly strong in Europe and the U.S. though it has not been spectacular,” said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels. “It’s common for companies to under-promise and over-deliver. There’s also still massive uncertainty about the global economy.”
About 56 percent of Stoxx 600 members to have posted results since July 12 have beaten analyst estimates for net income, according to data compiled by Bloomberg. That compares with 73 percent of S&P 500 companies during the same period, the data show.
Stocks erased an earlier advance as a report showed more Americans than projected filed applications for unemployment insurance last week. Initial jobless claims climbed by 19,000 in the week ended July 31, exceeding the highest estimate of economists surveyed by Bloomberg News, according to Labor Department figures.
The European Central Bank left its benchmark lending rate at a record low today as policy makers start to consider how to scale back the crisis-fighting measures introduced over the past two years. The Bank of England also kept its bond-stimulus plan in place and left its benchmark interest rate at a record low.
National benchmark indexes dropped in 10 of the 18 western European markets. The U.K.’s FTSE 100 Index retreated 0.4 percent, while Germany’s DAX and France’s CAC 40 both rose 0.1 percent.
Nokian surged 7.2 percent to 23.50 euros, the highest price since September 2008, after reporting second-quarter net income of 52.6 million euros. Analysts had estimated profit of 30.6 million euros, according to a Bloomberg survey.
Pirelli & C. SpA, Europe’s third-largest tiremaker, climbed 2.8 percent to 5.62 euros.
Aviva soared 7.2 percent to 394.3 pence. Operating profit at the U.K.’s second-biggest insurer climbed to 1.27 billion pounds ($2 billion), beating the 1.17 billion-pound estimate of six analysts surveyed by Bloomberg. Net income rose to 1.08 billion pounds from 675 million pounds a year earlier.
Unilever declined 5.2 percent to 1,736 pence, dragging a measure of food and beverage shares to the biggest drop in the Stoxx 600, after saying second-quarter underlying sales advanced 3.6 percent from a year earlier. Analysts had expected growth of 4 percent, according to the median estimate of seven surveyed by Bloomberg News.
Barclays fell 4.7 percent to 324 pence. The U.K.’s third-biggest bank said first-half net income rose 29 percent, beating analysts’ estimates, as provisions for bad loans declined. Revenue at Barclays Capital, the investment banking operation led by Robert Diamond, dropped by 32 percent as income from the division’s rates and commodities operations declined.
KBC Groep NV, Belgium’s largest bank and insurer by market value, advanced 1.2 percent to 35.47 euros. Second-quarter profit excluding some items rose to 554 million euros, beating the 465.1 million-euro average of nine analyst estimates compiled by Bloomberg.
Zurich Financial Services AG, Switzerland’s largest insurer, fell 4.3 percent to 238.9 Swiss francs after posting a 51 percent decline in second-quarter profit on increased loan- loss provisions for its commercial property books in the U.K and Ireland.
Bayer AG rose 4.2 percent to 48.51 euros after saying its Xarelto drug was as effective as the standard therapy of Sanofi-Aventis SA’s Lovenox plus warfarin in preventing potentially deadly blood clots in the lungs and legs.
Hexagon AB surged 8.7 percent to 134.6 kronor, its highest level since 2007. The world’s biggest maker of measuring instruments reported that second-quarter profit rose to 495 million kronor ($69 million) from 354 million kronor a year earlier. Analysts had estimated net income of 486 million kronor, according to a survey by Bloomberg.