European Stocks Fall; Barclays, Autonomy, Ahold Shares Decline

By Adam Haigh

Oct. 20 (Bloomberg) -- European stocks retreated from a 12- month high after Qatar said it would sell a stake in Barclays Plc and Autonomy Corp. reported earnings at the lower end of its forecasts.

Barclays sank 5 percent after Qatar Holding LLC said it would sell more than 379 million shares in the U.K.’s second- biggest bank. Autonomy, the U.K.’s second-largest software maker, dropped 8.8 percent, the steepest decline on the Dow Jones Stoxx 600 Index. Royal Ahold NV slid 2.9 percent after sales at its Albert Heijn stores fell for the first time in almost six years.

Europe’s Stoxx 600 dropped 0.4 percent to 248.39 at 9:31 a.m. in London, erasing an earlier advance of 0.4 percent. The gauge has jumped 57 percent since March 9 as Royal Philips Electronics NV reported an unexpected third-quarter profit and results from JPMorgan Chase & Co. and Google Inc. beat estimates. The rally has pushed valuations on the index to 49.5 times reported earnings, near the most expensive level since 2003, Bloomberg data show.

“There are certain companies in certain sectors that are showing improvements in demand but the overall situation is still very anemic indeed,” for the economy, said Roger Nightingale, London-based global strategist at Pointon York Ltd. “We’ve had a gigantic fall in activity followed by a very mild bounce,” he told Bloomberg Television.

U.S., Asian Shares

Futures on the Standard & Poor’s 500 Index expiring in December were little changed and Nasdaq-100 Index futures gained 0.6 percent after profit at Apple Inc. and Texas Instruments Inc. topped analysts’ estimates. The MSCI Asia Pacific Index rose 1 percent.

Barclays slipped 5 percent to 363 pence. Qatar Holding intends to sell 379.2 million shares in Barclays by way of an accelerated bookbuild, and will exercise an equivalent amount of warrants at 197.775 pence.

Autonomy dropped 8.8 percent to 1,455 pence, the biggest intraday slump since July. The U.K.’s second-largest software maker posted earnings excluding one-time items of 20 cents a share after forecasting on Oct. 8 it would be able to report earnings-per share of 20 cents to 23 cents.

The results were “at the lower end” of expectations, George O’Connor, a London-based analyst at Panmure Gordon & Co., wrote in a note to clients today as he cut his price estimate on Autonomy shares by 4.2 percent to 1,790 pence. He retained his “buy” recommendation on the stock.

Ahold

Ahold, the Dutch owner of the U.S. Stop & Shop grocery chain, declined 2.9 percent to 8.53 euros. Revenue for the third quarter was in line with the average estimate in a Bloomberg survey of nine analysts and same-store sales at its Dutch Albert Heijn unit fell for the first time in almost six years on increased discounting and a drop in food prices.

Apple rose 5.1 percent to $199.55 in Germany after fourth- quarter profit and revenue topped estimates, fueled by back-to- school orders for the iPhone, iPod and Macintosh computer.

Texas Instruments gained 2 percent to $23.98. The second- largest U.S. chipmaker said earnings will be 42 cents to 50 cents a share this quarter, more than the 40 cents projected by analysts.

Thirty-six of the 45 companies in the S&P 500 that reported since Oct. 7 surpassed analysts’ projections, data compiled by Bloomberg show. The benchmark index for American equities has rallied 62 percent from a 12-year low in March on signs the economy is emerging from the worst recession in seven decades.

Builders probably broke ground in September on the most houses in 10 months, showing further stabilization in the industry at the heart of the U.S. recession, economists said before a Commerce Department report at 8:30 a.m. in Washington.

Royal KPN NV, the largest Dutch phone company, gained 2.1 percent to 12.46 euros after Goldman Sachs Group Inc. raised its recommendation to “buy” from “neutral.”

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net