ECONOMY

Europe stocks fall as investors weigh earnings, Russia sanctions

European stocks fell for a fifth day as investors weighed mixed earnings from companies including Ocado Group Plc and Next Plc, while European Union officials said that new sanctions against Russia will be enacted on Friday. U.S. stock-index futures and Asian shares slipped.

Next slid 2.4 percent after posting first-half profit that missed analyst predictions. Ocado gained 2.8 percent after third-quarter sales grew more than analysts had estimated. Air France-KLM Group added 2.6 percent after saying it plans to increase earnings by as much as 10 percent a year between 2013 and 2017.

The Stoxx Europe 600 Index fell 0.2 percent to 343.89 at 1:23 p.m. in London. The equity benchmark has dropped 1 percent this week as a poll indicated for the first time that a majority of Scots favor independence ahead of next week’s referendum. The index is heading for its first weekly decline in five. Standard & Poor’s 500 Index futures slipped 0.4 percent today, and the MSCI Asia Pacific Index fell 0.4 percent.

“European earnings are still pretty mixed, but people’s expectations are aligning to more realistic ones,” said Andrew Parry, who helps oversee about 2.6 billion euros ($3.36 billion) as chief executive officer at Hermes Sourcecap Ltd. in London. “Summer months are typically fickle, so now is the time markets want to sort out the trends to play through the New Year. It’s not a forgiving market, so a successful company slightly missing earnings estimates can be treated quite harshly.”

Russia sanctions

Representatives of the 28 EU governments agreed to implement plans to bar some Russian state-owned defense and energy companies from raising capital in the bloc, three EU officials said under condition of anonymity in Brussels. The EU also will lay out its conditions for eventually suspending the measures, they said.

EU governments voted for the sanctions on Sept. 5, delaying their implementation as the cease-fire between Ukraine and Russian-backed separatists began to take hold.

A report at 8:30 a.m. in Washington may show initial jobless claims in the U.S. fell to 300,000 in the week ended Sept. 6, from 302,000 the previous period, according to economists surveyed by Bloomberg.

Next dropped 2.4 percent to 6,995 pence after reporting first-half underlying pretax profit of 324.2 million pounds, missing the average analyst estimate of 329 million pounds.

Ashmore Plc tumbled 6.4 percent to 323 pence. The money manager said full-year pretax profit fell 34 percent to 170.3 million pounds ($277 million) due to a stronger U.K. currency and lower performance fees. That missed the average analyst prediction of 176.5 million pounds.

Ocado advanced 2.8 percent to 320.5 pence after Britain’s largest online-only grocer said retail gross sales climbed 15.5 percent in the third quarter. That beat analysts’ projections for a 14.8 percent increase.

Air France-KLM rose 2.6 percent to 8.69 euros. Europe’s largest airline will seek to lift operating profit by as much as 10 percent each year as it expands its low-cost business and offers more services to leisure travelers. [Bloomberg]