EUROPE MARKETS: European Stocks Face Day 3 Of Losses As Retailers, Banks Slide
December 15 2017 - 5:50AM
Dow Jones News
By Carla Mozee, MarketWatch
H&M plunge after sales update
Stocks across Europe were lower Friday, as retail and bank
shares traveled into negative territory, putting the regional
benchmark on track for a third straight loss and a decline for the
week.
How markets are moving: The Stoxx Europe 600 index slipped 0.1%
to 388.54, with technology and consumer services shares down the
most. The utilities and telecoms sectors were the only ones
advancing. On Thursday, the gauge fell 0.5%
(http://www.marketwatch.com/story/european-stocks-sag-with-ecbs-final-policy-meeting-of-the-year-on-deck-2017-12-14)
and marked its lowest close in a week.
For the week, the Stoxx 600 was looking at a 0.3% decline. Last
week, it rose 1.4%.
On national bourses, Germany's DAX 30 index gave up 0.4% to
13,020.69 and was on course to fall 1% for the week.
(http://www.marketwatch.com/story/european-stocks-step-back-from-highest-in-5-weeks-but-retailers-gain-ground-2017-12-13)France's
CAC 40 fell 0.2% to 5,344.44.
Spain's IBEX 35 was up 0.1% at 10,182.50. In London, the FTSE
100 was down 2 points at 7,446.11
(http://www.marketwatch.com/story/ftse-100-struggles-for-3rd-day-as-banks-fall-but-on-course-for-weekly-advance-2017-12-15).
The euro traded at $1.1791, up from $1.1778 late Thursday.
In the bond market, the yield on Germany's 10-year government
bond fell 1 basis points to 0.30%, according to Tradeweb.
Check out: What European stock-market sector looks good in 2018?
(http://www.marketwatch.com/story/what-stock-market-sector-looks-good-in-2018-think-planes-trains-and-automobiles-2017-12-11)
What's moving markets: Retail stocks struggled, led by Hennes
& Mauritz AB, or H&M. Its shares plunged by the most since
2001 following a disappointing sales report from the Swedish
fashion retailer. At the same time, luxury goods retailer Salvatore
Ferragamo SpA tumbled on concerns surrounding its outlook. The
Stoxx Europe 600 Retail Index dropped 1.9%.
Meanwhile, worries surrounding Republican-led efforts in
Washington to cut taxes cropped up again, sending U.S.-listed bank
shares lower Thursday, and European bank stocks followed that lead
Friday. Expectations for tax cuts and an overhaul in U.S. tax
polices have at times boosted bank stocks worldwide throughout the
last year.
Florida Sen. Marco Rubio on Thursday told Senate leaders he'll
vote against the tax bill unless it includes a larger expansion of
the child tax credit. Also, several Republican senators have
expressed doubts about the tax overhaul ahead of an expected vote
on the final bill next week, according to The Wall Street Journal.
(https://www.wsj.com/articles/house-senate-republicans-reach-deal-on-final-tax-bill-1513185360)
In Brussels, EU leaders were meeting at their summit where
Brexit is high on the agenda. The group is expected to give the
green light for divorce talks to move onto the second phase
(http://www.marketwatch.com/story/breakthrough-on-brexit-terms-opens-way-to-next-phase-of-talks-2017-12-08).
U.K. Prime Minister Theresa May this week suffered a legislative
defeat as the U.K.'s lower house voted to amend the Brexit bill to
give members of parliament the power to reject the final divorce
deal struck with Brussels. May on Thursday reportedly said she was
"disappointed" by the vote, but that Britain remains on course to
exit from the European Union in 2019.
(https://www.wsj.com/articles/house-senate-republicans-reach-deal-on-final-tax-bill-1513185360)What
strategists are saying: "European equity markets are slightly
softer as investors mull the possibility that the U.S. tax reform
bill may get derailed at the last minute," said Rebecca O'Keeffe,
head of investment at Interactive Investor, in a note. "The
Republicans can afford a draw in the Senate, as Vice president Mike
Pence casts the deciding vote, but this deal is a key risk for
markets, and its defeat, while unlikely, could cause carnage."
"The main obstacle to [a Brexit] transition deal lies within
British domestic politics, rather than in negotiations between the
U.K. and EU-27. As Brexit negotiations turn to the more complex
task of defining a new post-Brexit UK/EU relationship in the coming
year, risks to a final deal are likely to intensify rather than
diminish," said Huw Pill, chief European economist at Goldman
Sachs, in a note released Friday.
Stock movers: H&M shares (HM-B.SK) sank 15% after the
apparel retailer said fourth-quarter sales fell to 50.39 billion
Swedish kronor ($6 billion), hurt by declining visits by customers
to its stores
(http://www.marketwatch.com/story/hm-sales-down-as-store-visits-decline-2017-12-15)
and sluggishness in embracing e-commerce. Analysts polled by
FactSet had expected 54.07 billion kronor in sales.
Salvatore Ferragamo SpA (SFER.MI) dropped 7.8% after the
high-end fashion retailer said it was unable to confirm mid-term
targets it presented earlier this year.
Among bank stocks, shares of Société Générale SA (GLE.FR) lost
1.2%, Commerzbank AG (CBK.XE) fell 0.6% and Barclays PLC (BCS)
(BCS) was down 1.4%. The Stoxx Europe 600 Bank Index was off
0.5%.
Tele2 AB (TEL2-B.SK) rose 2.3% after Deutsche Telekom AG (DTEGY)
said it's reached an agreement with Tele2 under which T-Mobile
Netherlands will acquire Tele2's Dutch business for 190 million
euros
(http://www.marketwatch.com/story/deutsche-telekom-to-buy-tele2-abs-dutch-business-2017-12-15)
($223.8 million) in cash and a stake of 25% in the combined
company.
(END) Dow Jones Newswires
December 15, 2017 05:35 ET (10:35 GMT)
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