Skanska to lay off thousands; Burberry sales fall
European stocks came under pressure Wednesday, as a round of corporate financial updates failed to lift an investing mood dimmed by losses on U.S. stock markets.
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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 0.2% to 397.29, with the consumer services and telecom sectors losing the most. But the tech, utility and basic materials groups were higher. On Monday, the pan-European benchmark rose 0.1%.
Germany's DAX 30 index was down 0.2% at 13,219.99, and France's CAC 40 gave up 0.2% to reach 5,498.62. Spain's IBEX 24 fell 0.5% to 10,466.20.
The U.K.'s FTSE 100 index dropped 0.3% to 7,733.06, heading toward a third straight loss.
The euro bought $1.2236, 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. The S&P 500 and the Nasdaq Composite also pulled back from record highs.
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: One of the biggest losers on the Stoxx 600, Burberry (BRBY.LN) shares slumped 6.8% after the luxury-goods 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 5.8% after the company 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.
Pearson (PSON.LN) shares slid 6.4% after the 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 range.
UBM PLC (UBM.LN) jumped 13% 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 7%.
Economic data: The final reading on eurozone inflation in December came in at 1.4%, meeting expectations.
(END) Dow Jones Newswires
January 17, 2018 05:49 ET (10:49 GMT)