WPP shares fall 10% after ad giant cuts revenue growth view
European stocks slumped Wednesday, with investors assessing fresh data on the health of the eurozone economy, as market participants counted down to a key meeting of central bankers.
The Stoxx Europe 600 index lost 0.5% to close at 373.92, partly erasing a 0.8% jump from Tuesday, when the benchmark ended a three-session losing streak.
Equity investors appeared to be in a risk-off mood early Wednesday after U.S. President Donald Trump said late Tuesday that he's ready to shut down the government (http://www.marketwatch.com/story/trump-threatens-shutdown-over-border-wall-funding-predicts-end-of-nafta-2017-08-22) to win funding for a border wall with Mexico.
Trump, during a rally with his supporters in Arizona, also warned of the possible termination of the North American Free Trade Agreement.
"Today is a classic example of traders not having a major reason to buy, so stocks drifted lower," said David Madden, market analyst at CMC Markets in a note.
"Traders are in wait and see mode ahead of the Jackson Hole symposium that starts tomorrow," he added.
Draghi speaks: Investors remained focused on the Kansas City Federal Reserve Bank's central bank symposium in Jackson Hole, Wyo., which starts Thursday and runs through Saturday. European Central Bank President Mario Draghi will be a featured speaker on Friday.
"The stakes are high for Mario Draghi during the Jackson Hole Symposium as he is expected to avoid talking about tapering at this point in an attempt to soften the euro but it will be virtually impossible for him to successfully sidestep any questions regarding the matter," said ADS Securities research Konstantinos Anthis in a note.
On Wednesday, Draghi spoke at a gathering of Nobel Laureates at the Lindau Meeting on Economic Sciences in Germany. Later, he will travel to Jackson Hole.
PMI readings: The eurozone economy kept up its growth momentum in August, according to data from IHS Markit, with a strong rise in manufacturing activity offsetting a slowdown in services.
The preliminary reading of the eurozone composite purchasing managers index was 55.8, a notch up from 55.8 in July. Analysts polled by FactSet expected a reading of 55.7. The flash manufacturing PMI came in at 57.4, up from 56.5 the previous month and compared with expectations for 56.4. For services, the preliminary PMI was at 54.9. That compares with 55.4 in July, the same reading expected in the FactSet survey.
"The latest PMI readings for the eurozone signal a continuation of the recent strong performance of the currency bloc's economy. This stabilization in the rate of expansion is pleasing, following signs of growth easing in recent months," Andrew Harker, associate director at IHS Markit, said in the report.
The euro edged up to $1.1804, from around $1.1777 ahead of the data and late Tuesday in New York.
Stock movers: WPP PLC (WPP.LN) (WPP.LN) shares dropped 11% after the world's largest advertising company cut its forecast for growth for 2017 (http://www.marketwatch.com/story/wpp-revenue-stutters-as-client-spending-drops-2017-08-23), citing major slowdowns in key industries such as consumers-goods and retail.
National indexes: Germany's DAX 30 index shed 0.5% to 12,174.30 and France's CAC 40 index lost 0.3% to 5,115.39.
The U.K.'s FTSE 100 index ended marginally higher at 7,382.65 (http://www.marketwatch.com/story/ftse-100-wobbles-as-wpp-shares-tumble-2017-08-23), buoyed by a slide in the pound that fell to an almost eight-month low against the euro at EUR1.0832.
Read:What could lift Germany's DAX out its summer slump (http://www.marketwatch.com/story/germanys-dax-looks-set-to-rebound-from-its-summer-slump-says-capital-economics-2017-08-22)
(END) Dow Jones Newswires
August 23, 2017 12:26 ET (16:26 GMT)