European Stocks Decline Before Jobs Report; Barclays Shares Fall
Most European shares fell as a government report showed the U.S. economy lost more jobs than estimated in September, increasing the likelihood that the Federal Reserve will be forced to act to shore up the recovery.
Barclays Plc slid 2.2 percent after Abu Dhabi bought protection against a loss in value of its entire 6.3 percent stake. Actelion Ltd. rallied 10 percent after the Wall Street Journal reported that Switzerland’s largest biotechnology company may sell itself.
The Stoxx Europe 600 Index was almost unchanged at 262.27 as of the 4:30 p.m. close in London, as four stocks declined for every three that advanced. The gauge has gained 1.2 percent this week amid speculation that the U.S. Federal Reserve may follow the Bank of Japan in unveiling another round of stimulus measures to prop up the flagging economic recovery.
The U.S. jobs report “brings quantitative easing all the more closer,” said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, in a phone interview from Brussels. “Bernanke is waiting with his $1.5 trillion dollar gun, ready to shoot. In the long term it’s still worrying to me that the economy is in this state.”
U.S. employers cut staffing by 95,000 workers after a revised 57,000 decrease in August, Labor Department figures in Washington showed today. The median estimate of economists surveyed by Bloomberg News called for a 5,000 drop. The unemployment rate unexpectedly held at 9.6 percent.
A lack of jobs underscores the concern expressed by some Fed policy makers that the rebound from the worst recession since the 1930s has been too slow and may require easier monetary policy.
National benchmark indexes declined in 10 of the 18 western European markets today. France’s CAC 40 fell 0.2 percent and the U.K.’s FTSE 100 slipped less than 0.1 percent. Germany’s DAX gained 0.3 percent.
The Stoxx 600 has rallied 13 percent since its low this year in May as concern eased that the region’s sovereign-debt crisis and slowing growth in China and the U.S. will curb corporate profits, while central banks signaled they stand ready to act should a slowdown in the economy worsen. Japan’s central bank unexpectedly cut its overnight interest rate to a range of zero to 0.1 percent on Oct. 5 and said it would set up a 5 trillion yen ($60 billion) fund to buy assets in an effort to head off deflation and bolster growth.
Barclays sank 2.2 percent to 297.25 pence. Abu Dhabi’s Sheikh Mansour bin Zayed Al Nahyan bought protection against a loss in value of his stake in the U.K. lender from Nomura Holdings Inc., which hedged its commitment by selling 220 million Barclays shares.
Nomura sold the shares at 295 pence per share, for a total of 649 million pounds ($1 billion), according to two people familiar with the deal.
Sage Group Plc declined 4.6 percent to 269.6 pence after UBS AG cut its recommendation on the shares to “sell” from “neutral,” saying it is skeptical about the possibility of any buyers for the U.K.’s largest software maker.
Gecina SA dropped 5.3 percent to 86 euros after Banco Castilla-La Mancha sold 1 million shares in the French real- estate company for 86 euros each.
Amadeus IT Holding SA retreated 2.9 percent to 13.48 euros as some shareholders sold a stake in the flight-reservations provider for as much as 617 million euros ($857 million) after the stock gained more than 25 percent since its initial public offering in April.
BC Partners, Cinven
Private-equity firms BC Partners Ltd. and Cinven Ltd. each sold 4.4 percent of Amadeus, cutting their respective holdings to 13 percent, the company said in a filing. Spanish airline Iberia Lineas Aereas de Espana SA sold another 1.5 percent stake, reducing its holding to 7.5 percent. The shares went for 13.50 euros each.
Credit Suisse Group AG fell 1.9 percent to 42.4 Swiss francs after Barclays downgraded the shares to “underweight” from “equal weight,” saying the Swiss bank has more of a capital shortfall than UBS AG and is trading “more expensively,” according to a report today.
Actelion rallied 10 percent to 49.34 francs, the biggest gain in more than three years. The company has formed a committee of board members to evaluate alternatives and has hired a financial adviser, the Wall Street Journal reported.
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