U.K. stocks were little changed, with the FTSE 100 Index heading for its first weekly loss since August, as U.S. politicians wrangled over an emergency budget.
Centrica Plc slipped 2.3 percent after JPMorgan Chase & Co. downgraded the biggest energy supplier to British homes. Ladbrokes Plc tumbled to the lowest price in almost a year after the gambling company said that earnings before interest and taxes for its digital business in 2013 will fall short of analysts’ estimates. TUI Travel Plc climbed the most in five months after raising its outlook for operating-profit growth.
The FTSE 100 Index added 14.06 points, or 0.2 percent, to 6,565.59 at the close in London. The gauge has slipped 0.5 percent this week, paring its monthly gain to 2.4 percent, as euro-area manufacturing data missed economists’ estimates and as U.S. lawmakers neared a deadline to prevent a shutdown of the federal government. The FTSE All-Share Index rose 0.2 percent, while Ireland’s ISEQ Index slipped 0.4 percent.
“We’ve got very tight deadlines for U.S. politicians to agree to a budget, without which there will either be a government shutdown or a cease of payment of debt,” said Jim McCormick, global head of asset allocation research at Barclays Plc in London. “For equities, it’s a clear negative if either of those happened. The probability of it happening is not negligible, but it is low.”
U.S. lawmakers have until Monday to agree to an emergency budget to keep the federal government operating from Oct. 1, the beginning of the 2014 fiscal year.
The National Association of Realtors said its index of pending house sales in the world’s biggest economy fell 1.6 percent in August. The median forecast in a Bloomberg poll had called for a 1 percent decline. Sales dropped a revised 1.4 percent in July.
A Labor Department report showed that 305,000 Americans filed for unemployment benefits last week, compared with a revised 310,000 in the preceding week. The median estimate of economists surveyed by Bloomberg had called for 325,000.
The third and final reading of a Commerce Department report showed U.S. gross domestic product expanded at an annualized 2.5 percent pace in the second quarter, trailing the 2.6 percent rate predicted by economists in a separate survey.
In the U.K., a release from the Office for National Statistics showed that gross domestic product expanded at a 0.7 percent annual rate in the second quarter. That matched the median forecast in a Bloomberg survey.
The benchmark FTSE 100 has gained 5.6 percent this quarter as Chinese economic reports exceeded predictions and as the Federal Reserve unexpectedly refrained from reducing its monthly asset purchases at a September policy meeting. The index has rallied 11 percent so far this year.
Centrica declined 2.3 percent to 366.9 pence after JPMorgan lowered its recommendation on the shares to neutral from buy, citing increased risks after Labour Party leader Ed Miliband pledged on Sept. 24 to freeze energy prices should he win the next election. The power company has tumbled 8.8 percent this week, on course for its biggest weekly loss since March 2009.
SSE Plc, which generates 97 percent of its revenue from the U.K. according to Citigroup Inc., fell 2 percent to 1,460 pence. The utility has plunged 7.6 percent since its close on Sept. 24.
Ladbrokes slid 7.6 percent to 173.8 pence. The betting company predicted full-year operating profit before exceptional items from online gambling of 10 million pounds ($16 million) to 14 million pounds this year. The average analyst estimate had called for 27.5 million pounds, according to Ladbrokes.
Barclays Plc slipped 1.4 percent to 269.2 pence. A gauge of banks posted the worst performance among 19 industry groups in the Stoxx Europe 600 Index.
Thomas Cook Group Plc dropped 6.6 percent to 145.3 pence after the tour operator said that winter bookings have slowed from a year earlier because of warm weather across Europe.
TUI Travel advanced 3.9 percent to 370.4 pence after saying it expects at least 11 percent growth in full-year operating profit excluding currency swings. It had forecast growth of 10 percent. The travel operator will post its preliminary results for the year on Dec. 10.