Sanofi shares fall after the French drugmaker loses a patent case
European stocks ended slightly lower in choppy action on Friday after the closely watched U.S. jobs report painted a mixed of the country's job market.
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The headline nonfarm payrolls number for December missed expectations at 156,000 (http://www.marketwatch.com/story/us-adds-156000-jobs-in-december-2017-01-06-81033418), but wages jumped by the fastest rate in seven years. The November jobs number was revised sharply higher.
After the data, the Stoxx Europe 600 index trimmed its loss for the day to end 0.1% lower at 365.45. For the week, the benchmark closed 1.1% higher after entering bull-market territory on Tuesday.
U.S. economic data tend to influence investing sentiment in Europe, as it gives an indication of future interest rates and global growth.
"Stock markets remain enamored by the growth potential of the U.S. economy and potential corporate earnings boost from lower taxes and lighter-touch regulation under President Trump," said Jasper Lawler, senior market analyst, at London Capital Group.
"At these elevated levels any exogenous shock can cause a big pullback in stock markets, but so far there is no evidence of a trend reversal," he added.
Stoxx 600 upgrade: That message was echoed at strategists at Bank of America Merrill Lynch. Even after a 6% rally for the Stoxx 600 over the past month, the index has more room to climb, they said in a note on Friday.
They lifted their 2017 year-end target to 390 from 360, saying a weaker euro, stronger economic growth and rising commodity prices would help boost corporate earnings. That means the index has 7% upside from Friday's levels, according to the BAML forecast.
The bank is also staying bullish on risk assets overall as laid out in our Need to Know column today (http://www.marketwatch.com/story/time-to-go-for-the-big-short-with-stocks-heres-when-youll-know-2017-01-06).
Movers: Shares of Sanofi SA (SAN.FR) (SAN.FR) pulled the Stoxx 600 lower on Friday, falling 2% after the French drugmaker lost a patent case related to its cholesterol drug Praluent (http://www.marketwatch.com/story/sanofi-regeneron-cholesterol-drug-barred-by-judge-2017-01-05).
The drop also capped gains for France's CAC 40 index , which ended up 0.2% at 4,909.84.
Elsewhere, Germany's DAX 30 index inched 0.1% higher to 11,599.01, while the U.K.'s FTSE 100 index rose 0.2% to 7,201.05 (http://www.marketwatch.com/story/ftse-100-breaks-8-day-winning-streak-ahead-of-us-jobs-report-2017-01-06).
Lloyds Banking Group PLC (LLOY.LN) rose 1.9% after Barclays lifted the lender to overweight from equal weight. Barclays said the U.K.'s economic prospects remain challenging, but are less severe than previously expected.
Other banks were also on the rise, getting a boost from rising yields following the U.S. jobs data. Higher yields tend to be a positive for the banking sector as the lenders can charge more for loans. Shares of HSBC Holdings PLC (HSBA.LN) (HSBA.LN) (HSBA.LN) added 1.1% and BNP Paribas SA (BNP.FR) put on 0.4%.
Rotork PLC (ROR.LN) jumped 4% after Goldman Sachs started coverage of the manufacturing company with a buy rating.
Deutsche Lufthansa AG (LHA.XE) (LHA.XE) dropped 3.1% after UBS cut the airline to sell from neutral.
Economic docket: Optimism over the eurozone economy rose more than expected in December. The European Commission's Economic Sentiment Indicator climbed to 107.8 last month, up from 106.6 in November.
German manufacturing orders fell (http://www.marketwatch.com/story/german-manufacturing-orders-slump-in-november-2017-01-06-2485488) 2.5% on the month in November, after rising strongly in October. Economists polled by The Wall Street Journal had forecast a 1.5% drop.
Retail sales in Germany dropped in November, too, down 1.8% from October. Overall for the eurozone, retail sales fell 0.4% in November following a surge in October.
France's trade deficit narrowed (http://www.marketwatch.com/story/french-trade-deficit-narrows-as-exports-rise-2017-01-06) in November as exports jumped, lifted by sales of transportation equipment, the French customs office said Friday.