Pearson to sell Penguin stake for $1 billion
European stocks finished with losses Tuesday, as investors took a cautious approach ahead of U.S. Federal Reserve Chairwoman Janet Yellen's testimony to Congress.
The Stoxx Europe 600 index fell 0.7% to close at 379.15, erasing Monday's 0.4% advance and then some.
The pan-European index traded with a gain of as much as 0.3% just after the open, but the optimism quickly fizzled.
"With the absence of any top tier news and the markets waiting for further indications on the Fed's policy when Janet Yellen testifies before Congress on Wednesday, investors and traders are currently in 'wait and see' mode," said FXTM chief market strategist Hussein Sayed in a note.
After the latest Fed minutes out last week, investors are still expecting the U.S. central bank to hike rates at least one more time this year, but they are waiting on clues as to the timing of the next tightening move.
"Dollar bulls are counting on the Fed Chair's continued hawkishness, and whether she will provide more details on monetary policy becoming tighter," Sayed said.
"However, it has been more than one year since the unemployment rate dipped below 5% and wage growth is still anemic, making it difficult for many investors to believe that interest rates will increase at the pace suggested by monetary policy makers," he added.
U.S. stocks were slightly weaker (http://www.marketwatch.com/story/stock-market-pivots-firmly-lower-in-early-afternoon-trade-following-trump-jr-tweets-2017-07-11) on Tuesday.
U.S. interest rates are important to investors globally as many assets are priced in dollars and the tone from the Fed signals the strength of the world's largest economy.
The euro traded at $1.1430, up modestly from $1.1400 late Monday in New York.
European indexes: Germany's DAX 30 index fell 0.1% to close at 12,437.02, while France's CAC 40 index was down 0.5% to finish at 5,140.60.
The U.K.'s FTSE 100 index gave up 0.6% to end at 7,329.76 (http://www.marketwatch.com/story/ftse-100-steers-lower-as-ms-pearson-fall-2017-07-11).
Stock movers: Shares of Pearson PLC (PSON.LN) fell 5.1% after the British education and publishing company said it is selling a 22% stake in Penguin Random House (http://www.marketwatch.com/story/pearson-sells-penguin-random-house-stake-for-1b-2017-07-11) for $1 billion to its joint-venture partner, German media company Bertelsmann SE.
Marks & Spencer Group PLC (MKS.LN) (MKS.LN) dropped 4.7% after the British retailer reported a 0.5% fall in U.K. like-for-like sales (http://www.marketwatch.com/story/ms-uk-same-store-sales-decline-2017-07-11) for the first quarter of fiscal 2018.
Pearson and M&S were the Stoxx Europe 600's two biggest losers.
Sanofi SA shares (SAN.FR) (SAN.FR) gave up 0.6%, as an earlier gain faded. The French drugmaker said it would buy vaccines biotechnology firm Protein Sciences (http://www.marketwatch.com/story/sanofi-to-buy-vaccine-maker-protein-sciences-2017-07-11) for an upfront payment of $650 million.
On the upside, TUI AG rose 0.7% after the travel firm said it has sold its remaining 8.5 million shares in Hapag-Lloyd AG (http://www.marketwatch.com/story/tui-sells-remaining-stake-in-hapag-lloyd-2017-07-11)(HLAG.XE) for 244.4 million euros ($278.3 million).
(END) Dow Jones Newswires
July 11, 2017 12:08 ET (16:08 GMT)