Fiat shares fall on prospect of U.S. civil suit
Continue Reading Below
European stocks dropped Thursday, retreating for a second session, as continuing U.S. political turmoil cast doubt on whether President Donald Trump's pro-economic growth policies will become reality.
The Stoxx Europe 600 index ) lost 0.6% to 388.87. No sector traded higher, with industrial, oil and gas and financial shares faring the worst. The move builds on Wednesday's slide of 1.2% , which marked the benchmark's biggest one-day percentage loss since Sept. 26, according to FactSet data.
Investors on Wednesday began fleeing assets perceived as riskier, such as stocks, after a report that Trump had asked James Comey, then director of the Federal Bureau of Investigation, to halt a probe into links between Trump's associates and Russian officials (http://www.marketwatch.com/story/us-stock-futures-under-pressure-amid-fresh-concerns-over-trump-2017-05-17). On Wall Street, the S&P 500 index and the Dow Jones Industrial Average logged their worst declines since Sept. 9.
Read:Here's how impeachment works -- and why Trump is safe for now (http://www.marketwatch.com/story/heres-how-impeachment-works---and-why-trump-is-safe-for-now-2017-05-17)
"With optimism rapidly diminishing over Trump's proposed fiscal spending and his administration coming under increasing pressure, the Trump rally seems to be a theme of the past," said FXTM research analyst Lukman Otunuga, in a note.
Continue Reading Below
"Stock markets may be in store for further punishment moving forward, as political turmoil in the US and ongoing geopolitical tensions are adding to the mounting uncertainty over Trump," he said.
European bank shares were struggling on concerns the Trump administration won't be able to push through looser regulatory rules for the financial industry. The Stoxx Europe 600 Bank flopped down 0.9%.
Pressure on shares of European exporters also came from strength in the euro, which this week rose above $1.11 for the first time since November. The shared currency on Thursday bought $1.1130, compared with $1.1159 late Wednesday.
Individual indexes: Germany's DAX 30 , which has notched record closing highs in recent sessions, fell 0.5% to 12,569.92.
In London, the FTSE 100 dropped 1.1% to 7,422.30. The index came under further pressure as the pound rose above $1.30 for the first time since September, after U.K. retail sales burst past expectations.
France's CAC 40 declined 0.6% to 5,285.54, while Spain's IBEX 35 moved down 1.1% to 10,665.10.
Stock movers: Fiat Chrysler Automobiles NV (FCA.MI) shares fell 5.1% after reports that the U.S. Justice Department plans to file a civil lawsuit (http://www.marketwatch.com/story/fiat-chryslers-stock-falls-5-after-report-of-possible-doj-suit-2017-05-18) against the auto maker over excess diesel emissions, if no agreement is reached.
Altice NV (ATC.AE) shares lost 2.1%. The Dutch telecom company broke European Union rules by carrying out its acquisition of PT Portugal before notifying or getting approval from regulators, the EU's competition watchdog said in a statement Thursday. (http://www.marketwatch.com/story/altices-stock-falls-after-eu-cries-foul-on-pt-portugal-buyout-2017-05-18)
Economic data: France's unemployment rate dropped to 9.6%, a five-year low (http://www.marketwatch.com/story/french-unemployment-rate-falls-to-5-year-low-2017-05-18), as the job market improved for young people.
U.K. retail sales rebounded (http://www.marketwatch.com/story/uk-retail-sales-rebound-overshoot-expectations-2017-05-18) in April, following a steep quarterly decline in the first three months of the year. Retail sales grew by 2.3% on the month, significantly more than the 1.5% growth seen in a Wall Street Journal poll.
(END) Dow Jones Newswires
May 18, 2017 05:35 ET (09:35 GMT)