By Tommy Stubbington
European stocks fell Tuesday, as some patchy corporate earnings
encouraged investors to pull back from a market that has rallied
sharply this year.
The Stoxx Europe 600 was 1.3% lower early in the afternoon.
Health-care stocks on the index led declines, falling 2.4%, as
Monday's steep decline in highflying U.S. biotechnology stocks
weighed on the sector in Europe.
Elsewhere, investors looked to earnings.
Swiss engineering firm Geberit AG slipped after it said the
surging Swiss franc hurt its first-quarter profit. Swedish
industrial-tools maker Atlas Copco and Finnish paper maker
UPM-Kymmene Oyj also declined after first-quarter results
disappointed.
On a more upbeat note, energy shares shrugged off an early fall
in the oil price to climb 0.5% following a smaller-than-expected
decline in first quarter profit for sector giant BP.
Daimler AG was among the top risers after posting strong
first-quarter earnings.
Still, analysts say more convincing signs of earnings growth
will be needed to drive markets higher, with the Stoxx 600 up 19%
so far in 2015.
"We have seen positive impulses like a weaker euro and ECB
[stimulus measures] priced in and people are waiting for some
positive earnings surprises. Overall we're not really seeing that
yet," said Christian Stocker, an equity analyst at UniCredit.
Germany's DAX index was 1.3% lower, France's CAC 40 lost 1.6%,
while the U.K.'s FTSE 100 was down 1.1%.
In the U.S., futures indicated a 0.2% opening loss for the
S&P 500. Changes in futures aren't necessarily reflected in
moves after the opening bell.
Tuesday's declines in Europe reversed the previous session's
surge in stock markets, which came after a shake-up of Greece's
team negotiating with creditors was seen by investors as increasing
the chance of a deal on further financial aid for Athens.
In bond markets, the relief continued on Tuesday, with Greek
two-year bond yields falling more than two percentage points to
19.8%. A week ago two-year yields touched nearly 30%. Yields fall
as prices rise.
"The Greek government looks to be laying the ground for at least
some form of political compromise," said analysts at Rabobank.
Still, Greek bonds remain at a level that indicates investors
are pricing in a considerable risk of default.
In currency markets, the dollar fell against the euro and the
British pound. The euro was up 0.6% at $1.0928 and sterling rose
0.4% to $1.5281.
The pound had earlier briefly dipped after the U.K. economy grew
more slowly than expected in the first quarter. Slower growth is
likely to encourage the Bank of England to hold off for longer
before raising interest rates.
In commodities, Brent crude was 0.1% higher at $64.90 a barrel.
Gold was steady at $1,203.10 an ounce.
Write to Tommy Stubbington at tommy.stubbington@wsj.com
Access Investor Kit for Geberit AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=CH0030170408
Access Investor Kit for Daimler AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=DE0007100000
Access Investor Kit for Atlas Copco AB
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=SE0000101032
Access Investor Kit for Atlas Copco AB
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0492557063
Access Investor Kit for Daimler AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US2338251083
Access Investor Kit for Geberit AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US36840V1098