LONDON MARKETS: Next Drops In London As Warm Weather Hurts Sales

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- Shares of Next PLC were pushed down in London on Tuesday following a profit warning from the clothing retailer, but Royal Bank of Scotland PLC shares popped higher after a trading update.

Next shares fell 4.6%, on course for their worst loss since September 2012. In its profit warning, the retailer noted third-quarter sales to date have risen 6%. It previously expected a gain of 10%, and it attributed the shortfall to unusually warm weather in September. If that weather runs through October, Next said it's likely to cut its full-year earnings forecast.

But near the top of the FTSE 100, RBS shares tacked on 2.5%, as the bank said it expects losses from bad loans in 2014 are likely to be "significantly lower" than the GBP1 billion ($1.6 billion) that it had anticipated.

Shares of Associated British Foods PLC were up 3.5% as Primark's parent company was upgraded to outperform from neutral at Credit Suisse. (Read more about European stock movers http://www.marketwatch.com/story/next-falls-primarks-parent-climbs-european-stock-moves-2014-09-30.).

The FTSE 100 slipped 0.1% to 6,641.90. It was on track for a 1.5% loss for the third quarter and a 2.6% decline for the month of September.

As the rest of Europe received mixed economic data Tuesday, the U.K.'s Office for National Statistics said the British economy expanded 0.9% in the second quarter. That compares with the previous growth estimate of 0.8% on a quarter-on-quarter basis.

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