Adidas springs higher; French economy expands; tobacco stocks hit
European stocks on Friday logged their lowest close in three months, flattened partially by a decline in shares of UBS following the Swiss bank’s earnings.
The Stoxx Europe 600 dropped 1% to end at 378.34, the weakest close since April 21, FactSet data showed, and only the oil-and-gas sector finished higher.
The pullback cemented the index’s 0.5% weekly loss, extending last week’s fall of 1.7%.
European markets on Friday ended on “a softer note after a weak Asia session and some late profit-taking in the tech sector heading into the U.S. close, which saw both the S&P 500 and Nasdaq close lower” on Thursday, wrote Michael Hewson, chief markets analyst at CMC Markets UK.
“We’ve seen a veritable earnings bonanza from the tech sector over the past week or so with Netflix, Alphabet and Facebook surprising to the upside, so hopes were high that Amazon would follow suit.”
Continue Reading Below
Amazon.com Inc. (AMZN) shares on Friday fell by more than 2% after the e-commerce heavyweight late Thursday posted a larger-than-expected drop of 77% in second-quarter earnings, hurt by the company’s spending (http://www.marketwatch.com/story/amazon-earnings-fall-77-shares-drop-2017-07-27).
European technology shares slid a collective 1.3% on Friday, in sympathy with the broader pressure in the sector.
Meanwhile, banking stocks were in focus with a stack of earnings reports coming from the sector.
Earnings roundup: UBS shares were knocked back by 2.9% on concerns over margins in the lender’s wealth management division. UBS did post a 14% profit rise in the second quarter, to 1.17 billion Swiss francs ($1.21 billion).
But shares of Credit Suisse Group AG (CSGN.EB) gained 3.1% after the Swiss lender posted better-than-expected net income of 303 million francs.
Read: UBS, Credit Suisse profit up after strategic shift (http://www.marketwatch.com/story/ubs-credit-suisse-profit-up-after-strategic-shift-2017-07-28)
Profit at French bank BNP Paribas SA (BNP.FR) fell 6.4% to EUR2.4 billion, but the result was better than anticipated, as an economic pickup in Europe bolstered business at several of its divisions. Shares flipped up to close 0.2% higher.
Spanish lender Banco Santander SA’s (SAN) profit an interest income rose in line with figures it outlined this month (http://www.marketwatch.com/story/santander-profit-rises-upbeat-on-banco-popular-2017-07-28-3485019) when it launched a capital increase to fund its cleanup of Banco Popular Español SA. Santander shares slipped 0.1%.
Outside of banks, British American Tobacco PLC (BATS.LN) and Imperial Brands (IMBBY) sank 6.8% and 3.8%, respectively, after the U.S. Food and Drug Administration said it plans for nicotine levels in cigarettes to be lowered to nonaddictive levels (http://www.marketwatch.com/story/fda-says-it-plans-to-lower-nicotine-levels-in-cigarettes-to-non-addictive-levels-2017-07-28).
Adidas AG (ADS.XE) rallied 8.8% after the German sports-apparel maker raised its full-year forecast.
Shares of Renault SA (RNO.FR) dropped 5.1% even as the French car maker’s first-half profit surged 59% (http://www.marketwatch.com/story/renault-profit-leaps-but-shares-decline-2017-07-28) on increased volume and as it received a larger payout from its holding in Nissan Motor Co. (NSANY)
National indexes: France’s CAC 40 index ended down 1.1% to 5,131.39, with Renault falling along with most of the benchmark’s components.
Germany’s DAX 30 ended off its worst levels of the session, down by 0.4% to 12,126.70. But the index has closed lower in eight of the past 11 sessions.
The U.K.’s FTSE 100 gave up 1% at 7,368.37, and Spain’s IBEX 35 was yanked down 0.6% to 10,536.10.
The euro fetched $1.1748, up from $1.1677 late Thursday in New York. The shared currency moved higher against the dollar (http://www.marketwatch.com/story/dollar-spins-wheels-ahead-of-gdp-report-expected-to-show-faster-clip-of-growth-2017-07-28) after a reading of U.S. second-quarter gross domestic product came in at 2.6%, falling short of expectations for a 2.8% increase.
Data: The French economy expanded 0.5% in the second quarter, with statistics agency Insee’s first estimate of growth showing exports climbed 3.1% while imports slowed.
Also from France, inflation rose 0.7% in July (http://www.marketwatch.com/story/french-inflation-steady-in-july-2017-07-28), the same rate notched in June.
German consumer prices rose (http://www.marketwatch.com/story/german-consumer-prices-rise-faster-than-expected-2017-07-28) by a faster-than-expected rate of 0.4% in July on the month, and inflation rose 1.5% on the year, according to Destatis.
(END) Dow Jones Newswires
July 28, 2017 13:12 ET (17:12 GMT)