Unemployment Claims Rise, Stocks Fall

123jump.com Staff
16 Jul, 2008
New York City

UK stocks edged lower after a fall in crude oil and base metal prices. Miners and energy stocks led the decliners dragging FTSE 100 index lower 0.4%. Financial rebounded on the rally in sector in the U.S. and in Europe after better than expected earnings from Wells Fargo. Barclays investors in the recent public offering have suffered a loss of 14%, before the completion of the offering. Separately, unemployment claims rose but the rate remained at 5.2%.

[R]2:00PM New York, 7:00PM London - UK employment rises to 5.2% in the quarter to June.[/R]

Stocks in London fell, led by commodity stocks as the crude oil prices declined and a government report showed that the country’s unemployment rose in the quarter to June.

Market Sentiment

In London trading FTSE 100 index declined 0.41% or 21.3 at 5,150.60.

Of 102 FTSE 100 stocks 65 rose, 36 fell, and 1 was unchanged. Admiral Group led advancers in the index shares with a rise of 10.83% followed by ICAP Plc increasing 8.80%.

Unemployment Claims Rise

The Office of National Statistics said on its Web site today in its labor market report that the unemployment rate remained unchanged from the previous quarter at 5.2% in the three months to June, while the number of unemployed people gained by 12,000 on the quarter.

The number of people claiming unemployment benefits increased 15,500 from the previous month to 840,100.

The ONS indicated that the number of vacancies fell by 32,200 from the previous quarter to 655,100.

The working age employment rate remained unchanged from the previous quarter in the three months to May at 74.9%, but was 0.4 percentage points lower from a year ago.

In addition, the employment level rose by 61,000 from the three months to February to 29.59 million in the quarter to May and increased 413,000 from a year ago.

Statistics also showed that the number of people in full-time employment rose 79,000 from the three months to February to 22.09 million, and the number of people in part-time employment dropped 19,000 from the quarter to February at 7.49 million in May.

On the overall, workforce rose by 30,000 to 31.64 million in the quarter to March 2008 from the previous quarter and all sectors, except manufacturing, reflected increases in jobs over the year, with finance and business services recording the largest annual increase.

According to the statistics office, total hours worked per week rose by 5.6 million from the three months to February to 945 million in the quarter to May.

Barclays Investors Face £363 million Stocks Loss

Bloomberg News reported yesterday that Barclays’ investors such as Sumitomo Mitsui Financial Group Inc will incur £363 million losses before the share sale closes tomorrow.

In particular, Sumitomo Mitsui faces a paper loss of £60 million after the British lender shed 14% through yesterday.

On June 24, a day before it announced its offer, Barclays offered the stock to investors at a 6.8% discount to its closing price of 302.63 pence.

Gainers & Losers

Admiral Group led advancers in the FTSE 100 index shares with a rise of 10.83% followed by rises in ICAP Plc of 8.80%, in British Airways of 6.88%, in TUI Travel of 6.80%, and RSA Insurance of 6.18%.

British Airways and TUI Travel rose as crude oil prices fell by $1.90 to $136.84 a barrel.

Wolseley led decliners in the FTSE 100 index shares with a drop of 6.20% followed by losses in Xstrata of 4.89%, in Antofagasta of 4.48%, in Petrofac of 4.44%, and Tullow Oil of 3.96%.

Wolseley dropped after reporting that profit in the 11 months ended June dropped 35% on housing slowdowns in the UK and US.

Commodity stocks also plummeted on easing oil and gold prices. Rio Tinto shed 3.74%, BHP Billiton declined 3.25% and Kazakhmys of 3.14%.