Skanska to lay off thousands; Burberry sales fall
European stocks finished in the red Wednesday, as a round of corporate financial updates failed to lift an investing mood dimmed by losses on U.S. stock markets.
A disappointing sales report from fashion house Burberry Group PLC and a warning of layoffs at Swedish construction company Skanska AB dragged on shares of those companies.
How markets are moving: The Stoxx Europe 600 index shed 0.1% to close at 397.97. On Tuesday, the pan-European benchmark rose 0.1% (http://www.marketwatch.com/story/european-stocks-head-higher-as-euro-pulls-back-2018-01-16).
Germany's DAX 30 index was down 0.5% at 13,183.96, and France's CAC 40 gave up 0.4% to finish at 5,493.99.
The U.K.'s FTSE 100 index finished down 0.4% at 7,725.43.
The euro bought $1.2235, down from $1.2259 late Tuesday in New York.
What's driving markets: The lower start for European equities followed losses on Wall Street on Tuesday. The Dow Jones Industrial Average suffered a big reversal (http://www.marketwatch.com/story/dow-on-track-for-200-point-jump-putting-26000-within-reach-2018-01-16), ending lower after breaking above the 26,00 level for the first time, though it was rallying Wednesday.
But overall, European and U.S. stocks have had a strong start to 2018 on expectations of stronger earnings from companies and continued improvement in global economic growth.
Financial updates streamed in as the new earnings season picked up pace, and traders were swift in punishing earnings releases that didn't meet the mark. Those losses helped drag on the market.
What strategists are saying: "Whilst there was no obvious cause for the selloff, there is some suggestion that rising concerns over the U.S. shutdown is weighing on investor's minds," said Simon Revington, an analyst at City Index.
"Congress has until Friday to pass a new spending bill, or else face a U.S. government shut down; immigration discussions have been complicating efforts to reach a deal on government spending," Revington said in his note.
Stock movers: Suffering the Stoxx 600's biggest loss, Burberry (BRBY.LN) slumped 9.3% after the luxury-goods seller said third-quarter retail sales fell 2% (http://www.marketwatch.com/story/burberry-retail-sales-slip-backs-2018-guidance-2018-01-17).
Skanska AB (SKA-B.SK) dropped 8.1% after the Swedish construction heavyweight said it plans to take a total fourth-quarter charge of 1.1 billion Swedish krona as part of restructuring efforts to boost profitability. Plans including laying off 3,000 workers (http://www.marketwatch.com/story/skanska-to-lay-off-3000-workers-take-restructuring-charge-in-moves-to-boost-profit-2018-01-17).
Pearson (PSON.LN) slid 4.7% after the publishing company said sales for U.S. higher education course materials fell 3% (http://www.marketwatch.com/story/pearson-upbeat-on-2017-results-no-change-to-tax-2018-01-17) in the first nine months of 2017, at the lower end of its guidance.
UBM PLC (UBM.LN) jumped 12% on news the events company was advancing in talks for a takeover by Informa, with a view to a merger (http://www.marketwatch.com/story/ubm-informa-in-talks-for-53-bln-merger-2018-01-17). Informa shares fell 5.7%.
Economic data: The final reading on eurozone inflation in December came in at 1.4%, meeting expectations.
New car sales in the European Union fell in December, with demand falling in all major EU markets (http://www.marketwatch.com/story/eu-new-car-registrations-drop-in-december-2018-01-17)except Spain, according to data published Wednesday
(END) Dow Jones Newswires
January 17, 2018 12:23 ET (17:23 GMT)