European Stocks Extend Weekly Loss as U.S. Data Miss Forecasts

Updated on
European Stocks Snap Winning Streak

European stocks slid, reversing earlier gains, as worse-than-estimated reports stoked concern about the U.S. economic recovery.

The Stoxx Europe 600 Index fell 0.4 percent to 396.45 at the close of trading, taking its weekly drop to 0.9 percent. The University of Michigan preliminary index of sentiment fell in May by the most in more than two years. Industrial production fell in April, while factory output unexpectedly stagnated, separate data showed.

“Everybody is getting nervous about U.S. growth because too much depends on a rebound,” said Karsten Junius, chief economist at Bank J Safra Sarasin Ltd. in Zurich. “Now indicator after indicator is either lackluster or revised down. Forward-looking data, like today’s sentiment report, is not really pointing to an acceleration. The market can be very forgiving, but it’s getting very late. We need a strong May to justify our global growth scenario.”

Energy shares and carmakers fell the most among Stoxx 600 industry groups. Total SA and Royal Dutch Shell Plc lost at least 1.5 percent. Seadrill Ltd., which has drilling contracts with Petroleos Mexicanos, tumbled 10 percent after the state-owned oil producer abandoned a contract with another company.

Auto shares fell 1.6 percent as a group as Volkswagen AG and BMW AG slid more than 2.3 percent.

European stocks rose as much as 0.7 percent earlier as gains in Roche Holding AG buoyed Swiss equities. Options and futures on European stocks and indexes expired today, increasing volatility.

Greek Banks

Greece’s ASE Index fell 2.6 percent, with Alpha Bank AE and Piraeus Bank SA dropping more than 7.2 percent. A 110-day-long standoff has triggered a liquidity squeeze, pulling the country back into a double-dip recession. Prime Minister Alexis Tsipras plans to raise the issue on the sidelines of talks at a European Union summit next week, a Greek government official said.

The Swiss Market Index reopened after a holiday yesterday, climbing 0.7 percent for the biggest rally in western Europe. Roche added 1.8 percent after a study showed its experimental lung-cancer drug doubled the likelihood of survival for some patients.

Royal DSM NV jumped 4.5 percent amid bid speculation. Stainless-steel maker Outokumpu Oyj, which didn’t trade yesterday because of a holiday in Finland, gained 2.7 percent. Peers rallied Thursday after the European Union widened a competition probe, opening up the possibility of tariffs on foreign exporters.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE