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U.K. Stocks Retreat as U.S. Employment Figures Trail Forecast

Dec. 3 (Bloomberg) -- U.K. stocks declined, trimming the first weekly advance for the FTSE 100 Index in four weeks, after a report showed an unexpected increase in U.S. unemployment.

Man Group Plc, Barclays Plc and Old Mutual Plc led a retreat in financial companies as banks and insurers snapped a two-day rally. Mining companies limited losses as gold and silver advanced in New York.

The benchmark FTSE 100 dropped 0.4 percent to 5,745.32 at the close in London after swinging betweens and losses at least 10 times today. The retreat trimmed this week’s increase to 1.4 percent. The FTSE All-Share Index lost 0.3 percent today, while Ireland’s ISEQ Index slid 0.4 percent.

Stocks erased an earlier advance after payrolls in the world’s largest economy rose 39,000 last month, less than the most pessimistic projection of economists surveyed by Bloomberg News. The jobless rate increased to 9.8 percent, the highest since April.

“The U.S. labor market continues to struggle,” said Joshua Raymond, a market strategist at City Index in London. “The data will inevitably re-raise concerns over the strength of the U.S. economic recovery.”

The FTSE 100 had rallied 4.3 percent over the previous two days, the biggest two-session increase since May, as the European Central Bank extended its emergency loan and bond-buying program and U.S. manufacturing and home sales data boosted confidence in the economy.

Man Group

Man Group, the biggest publicly traded hedge-fund manager, dropped 3.3 percent to 279.1 pence, after surging 11 percent in the previous three sessions. Barclays lost 2.5 percent to 268 pence and Old Mutual, the U.K.’s third-largest insurer by market value, climbed 2.5 percent to 120.1 pence.

Anglo American Plc climbed 1.7 percent to 3,050.5 pence and African Barrick Gold Ltd increased 1.3 percent to 559 pence as gold climbed above $1,400 an ounce in New York. Fresnillo Plc, the world’s largest primary silver producer, increased 4 percent to 1,568 pence as silver for March delivery jumped as much as 1.8 percent to $29.08 an ounce, the highest level since Nov. 9.

Johnson Matthey Plc, which generates the majority of its revenue from precious metals, rose 3.2 percent to 1,926 pence.

Berkeley Group Holdings Plc rallied 4.5 percent to 878 pence on the broader All-Share Index. The U.K.’s second-largest homebuilder by market value reported a 20 percent jump in first-half profit as the company sold more houses.

Greene King Plc gained 1.3 percent to 466 pence as the U.K. pub owner started talks with lenders to refinance 400 million pounds ($624 million) of debt. The undrawn revolving credit facility is due in April 2012.

Shares of SThree Plc also advanced, climbing 3.5 percent to 320.9 pence. The U.K. recruiting company said it expects its full-year performance to be slightly better than the market consensus, with gross profit 2 percent lower than last year at about 167 million pounds.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net

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