EUROPE MARKETS: European Stocks Slide, With DAX Falling The Most In 3 Weeks As Euro Leaps

By Carla Mozee, MarketWatchFeaturesDow Jones Newswires

German sentiment declines; Ericsson shares tumble

Stocks across Europe were swept lower Tuesday, under pressure as the euro stepped up to a 14-month high against the U.S. dollar and as disappointing corporate earnings reports rolled in.

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The Stoxx Europe 600 dropped 0.8% to 383.71, with tech, basic material and consumer-related shares leading the move lower. Health care and utility shares, however, rose.

Equity losses came after Republican leaders in the U.S. Senate late Monday ditched their bill to repeal and simultaneously replace ( much of the Affordable Care Act, or "Obamacare," because the health care bill didn't have enough votes to pass.

That seemed to rattle investors' faith that President Donald Trump would be able to push through his pro-growth agenda, and the ICE Dollar Index was pushed back to levels not seen since September 2016, Factset data show.

"Without a successful repeal of the Obamacare legislation, [U.S. President Donald] Trump will have trouble financing his own plans making it very difficult to see how the dollar can remain bullish," said ADS Securities researcher Konstantinos Anthis in a note.

That helped drive the euro above $1.15 against the U.S. dollar for the first time since May 2016. A stronger euro can hurt European exporters as it makes their products more expensive for overseas customers to purchase.

In Frankfurt, the exporter-heavy DAX 30 index dropped 1.2% to 12,43.93, losing the most since June 29, as the euro climbed to $1.1557 from $1.1479 late Monday.

European equities were among those that had rallied after Trump's election in November on the prospect that plans for higher fiscal spending and lower corporate taxes would benefit European companies.

Earnings season: Ericsson shares (ERIC) tumbled nearly 13% after the Swedish telecom-equipment maker swung to a bigger-than-expected net loss ( of 1.01 billion Swedish kronor ($122.3 million) in the second quarter. The company warned that earnings could weaken further as the market continues to struggle.

Zalando SE (ZAL.XE) shares sank 9.1% after the German online retailer's sales growth slowed in the second quarter, according to a preliminary earnings report.

But shares in Novartis AG (NOVN.EB) moved up 2.1% after the Swiss drug maker reported a slight gain in second quarter net income (

IG Group Holdings PLC (IGG.LN) rallied 11% after the spreadbetting company said full-year pretax profit has increased ( and that there's been no adverse impact from a U.K. regulator's recent proposals to reform the asset management market.

Individual indexes: France's CAC 40 index gave up 0.8% to 5,189.46, and Spain's IBEX 35 moved down 0.7% to 10,571.

Italy's FTSE MIB shed 0.4% at 21,403. The U.K.'s FTSE 100 was steady around 7,402. (

ECB and euro: "With the euro having broken above multi-months highs it will be key to see whether the single currency holds on to its gains ahead of the European Central Bank meeting on Thursday," Anthis said.

ECB President Mario Draghi is expected to be pleased with the progress of the euro area and attempt to prepare the markets for reduced stimulus from the ECB in the months to come, so the shared currency could trade with a positive bias going into the central bank's meeting, he added.

Data: German economic sentiment dropped in July (, according to the ZEW think tank, but the outlook for Europe's largest economy continues to be favorable.

The pace of U.K. inflation eased unexpectedly in June, to 2.6% (, the Office of National Statistics said.

(END) Dow Jones Newswires

July 18, 2017 08:34 ET (12:34 GMT)