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Most U.K. Stocks Retreat on U.S. New House Sales Report

April 23 (Bloomberg) -- Most U.K. stocks declined as a report showed new house sales unexpectedly plunged in the U.S., while Chinese manufacturing contracted for a fourth month.

ARM Holdings Plc fell 2.8 percent after the semiconductor designer reported slower growth in first-quarter revenue from royalties. AB Foods jumped the most in 14 years after saying that its Primark budget fashion chain will enter the U.S. Wolseley Plc advanced 1.7 percent after Credit Suisse Group AG recommended buying shares in the distributor of plumbing and heating products.

The FTSE 100 Index slipped 7.02 points, or 0.1 percent, to 6,674.74 at the close of trading in London as more than four stocks retreated for every three that advanced. The benchmark rose 2.1 percent in the past three days as GlaxoSmithKline Plc and AstraZeneca Plc rallied amid mergers-and-acquisitions activity. The FTSE All-Share Index slipped 0.2 percent today, while Ireland’s ISEQ Index dropped 0.7 percent.

“Investors anticipated that bad weather was the reason for falling new-home sales, but the question mark now is whether that is still the case in March or whether this is a trend,” Lorne Baring, who oversees about $500 million as managing director of B Capital in Geneva, said in a telephone interview. “The negative Chinese data in the morning and the poor home-sales report have compounded to affect sentiment negatively.”

The volume of shares changing hands in FTSE 100-listed companies was 25 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.

House Sales

A Commerce Department report showed sales of new U.S. residential properties unexpectedly slumped to an annualized 384,000 in March. Economists had predicted sales would climb to 450,000, according to a Bloomberg News survey.

Markit Group Ltd.’s preliminary reading for U.S. manufacturing this month showed manufacturing expanded at a slower-than-expected rate. The purchasing managers’ index unexpectedly fell to 55.4 in April from 55.5 in March. A reading above 50 means activity still expanded.

In China, a purchasing managers’ index from HSBC Holdings Plc and Markit gave a reading of 48.3 for April, matching the median estimate of economists surveyed by Bloomberg News.

Minutes from the April 9 meeting of the Bank of England’s Monetary Policy Committee showed that officials voted unanimously to leave their benchmark interest rate at 0.5 percent this month and to maintain the stock of purchased assets at 375 billion pounds ($629 billion).

ARM Retreats

ARM Holdings slid 2.8 percent to 956 pence. Revenue from royalties rose 3 percent to $144.5 million in the first quarter. The same measure of sales increased 32 percent in the year-earlier period.

The company made a $5 million deduction in the three months through March to correct for a customer that had over-reported its royalty figures.

Wm Morrison Supermarkets Plc fell 3.6 percent to 196.7 pence after JPMorgan Chase & Co. reduced its price estimate for Britain’s fourth-biggest supermarket chain by 14 percent to 150 pence. The brokerage said the retailer has relaxed its policy on depreciation, thereby reducing the quality of its earnings.

AB Foods jumped 8.8 percent to 2,962 pence. The company said Primark, which overtook the sugar division as the biggest contributor to profit last year, will open a store in Boston toward the end of next year. Further stores in the north east will follow through the middle of 2016. The company also reported earnings per share of 45.8 pence for the first half of its financial year, beating the median analyst estimate of 44.1 pence in a Bloomberg survey.

Wolseley, Spirent

Wolseley gained 1.7 percent to 3,417 pence. Credit Suisse raised the stock to outperform from neutral, citing the potential for capital returns to shareholders.

Spirent Communications Plc climbed 7.7 percent to 104 pence after the supplier of telecommunication-testing systems said operating profit in the first quarter amounted to $8.3 million, from $7.6 million a year earlier. The company also said order intake rose 12 percent in the three-month period.

Fenner Plc advanced 6.4 percent to 415 pence after the conveyor-belt maker announced a dividend of 4 pence per share. It paid out 3.75 pence last year.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Will Hadfield, Srinivasan Sivabalan

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