Yahoo Finance Weak Earnings Weigh on European Shares
European stocks stumbled Tuesday morning as a slew of corporate earnings reports failed to impress, while investors mostly shrugged off a strong performance in Asia. The major European stock indexes firmed early Tuesday, boosted by positive manufacturing data from around the world, but a flurry of weak earnings reports from major European corporates reversed the momentum in early deals.
At 10:44 GMT, the UK’s FTSE 100 Index is trading 6028.20, down 4.65 or -0.08%. Germany’s DAX index is at 12576.58, down 70.40 or -0.56% and France’s CAC 40 Index is trading 4872.06, down 3.87 or -0.08%.
Stocks moved higher at the get-go on the back of July’s final IHS Markit manufacturing PMI reading that showed manufacturing activity across the Euro Zone expanded for the first time since April 2019. Shares were further supported by positive data out of the U.S. that also helped boost sentiment. Also underpinning stocks was the announcement from the Reserve Bank of Australia to hold monetary policy steady.
All of these factors helped boost European shares early, but pessimism prevailed after the release of a number of disappointing earnings reports. Investors were also monitoring U.S. fiscal stimulus talks, with Congressional Democrats and the White House on Monday hinting at progress as lawmakers look to hammer out a new coronavirus relief bill.
Attention Turns to Earnings
BP reported a $6.7 billion second-quarter loss before the bell on Monday and cut its dividend after downgrading the value of some of its assets on expectations of lower commodity prices.
Diageo reported a larger-than-expected 8.4% drop in organic sales for the year up to June 30, sending the world’s largest spirit maker’s stock tumbling 6.6% to second-bottom of the Stoxx 600.
Bayer shares fell 3.7% after the German drugs and pesticides company posted a 9.5 billion Euro ($11.2 billion) net loss for the second quarter, hit by a $10.9 billion settlement for U.S. lawsuits alleging that its weed killer Roundup caused cancer.
Easyjet climbed 7.2% after its third-quarter trading update, while Merlin Properties was the top performer in the European blue-chip index in early trade, bouncing more than 12% on media reports of a possible takeover bid from Brookfield, according to Reuters.
U.S. Stock Futures Little Changed in Pre-Market Session
U.S. stock futures traded near the flat line at 11:05 GMT after the major averages logged in sharp gains to start the new month on Monday. Those gains were fueled by strong performances in Microsoft and Apple.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
