Sizable retreats for SocGen, Deutsche Bank, Santander; VW rallies
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets stumbled Thursday, trading lower on downbeat euro-zone sentiment data and disappointing U.S. jobless claims, as poorly-received results weighed on heavyweight banks.
The Stoxx Europe 600 index XX:SXXP -0.42% extended earlier losses and dropped 0.7% to 255.17, a reversal after trading as high as 258.53.
Leading losses for the index, shares of Alcatel-Lucent FR:ALU -13.14% plunged 13%. The company reported a 12% drop in first-quarter revenue and warned that the outlook for Europe and North America remains uncertain. Read more on Alcatel-Lucent.
Banks were also lower. In Paris, Credit Agricole SA FR:ACA -4.60% shed 4.6%, Société Générale SA FR:GLE -5.40% gave up 5.3% and BNP Paribas SA FR:BNP -3.56% shed 3.6%.
Pointing the other direction, Vivendi SA FR:VIV +2.96% rose 3% on a Bloomberg News report that the company may split into two units. In a statement, Vivendi denied it was planning such a split.
The French CAC 40 index FR:PX1 -0.74% sank 1.1% to 3,196.29, largely reflecting the retreat in banking shares.
Markets pushed deeper into the red after U.S. jobless claims dropped 1,000 to 388,000, virtually unchanged from the prior week and falling short of economists’ expectations. U.S. stocks traded in a narrow range after the opening bell on Wall Street.
Ahead of that, the broader European stock market was weighed by data from the European Commission, which said economic sentiment for the euro zone dropped to the lowest level since December. Its sentiment indicator fell to 92.8 in April from 94.5 the previous month, disappointing economists’ expectations. Read about dropping euro-zone sentiment.
“This basically tells us that there are concerns that it’s not just the periphery that is being affected, but it’s beginning to be a problem for the whole region,” said Peter Dixon, strategist at Commerzbank.
“The markets are beginning to ask ‘Where are we?’ We thought the economy was getting back on its feet, but events in the past few weeks illustrated that it may have been a little too optimistic,” he said.
In Germany, Deutsche Bank AG DE:DBK +2.48% sank 4.4% after reporting a 33% drop in first-quarter profit. Commerzbank AG DE:CBK +4.71% also fell, down 2.7%, and insurer Allianz SE DE:ALV +2.30% gave up 2.1%, weighing on the DAX 30 index DX:DAX -0.34% , down 0.8% to 6,651.10.
Also lower, Fresenius SE DE:FRE +1.29% shed 2.5% after it offered 3.1 billion euros ($4.1 billion) in cash for private hospital operator Rhoen-Klinikum AG DE:RHK +0.58% . Rhoen-Klinikum skyrocketed 45%.
Bucking the trend, Volkswagen AG DE:VOW +1.34% posted the biggest gain in Frankfurt, its shares up 7%, after the auto maker beat analyst expectations for first-quarter earnings and confirmed its full-year forecast. Volkswagen shares surge as earnings beat estimates
Spanish and Portugal indexes were under pressure amid earnings from major components. The worst-performing country index was Spain’s IBEX 35 XX:IBEX -1.77% , down 2.1% to 6,969.70.
Banco Santander SA ES:SAN -4.66% reported a 24% drop in first-quarter profit as its provisions for bad loans jumped, as its shares dropped 5%.
In Lisbon, the PSI 20 index PT:PSI20 -1.27% fell 1.4% to 5,118.50 after heavyweight retailer Jeronimo Martins SGPS SA PT:JMT -1.82% lost 3.5% as its first-quarter fell short of some analysts’ expectations.
AstraZeneca PLC UK:AZN -6.32% AZN -5.97% was a major drag in London, shedding 6.3% after Chief Executive David Brennan announced his resignation following lower-than-expected first-quarter earnings and a cut in full-year profit target. AstraZeneca CEO leaving as profits slide, warns
London’s FTSE 100 index fell UK:UKX -0.18% 0.4% to 5,693.53, as banks such as HSBC Holdings PLC HBC -0.56% UK:HSBA -0.85% , down 1.4%, followed suit in the selling trend seen across Europe.
However, Royal Dutch Shell UK:RDSA +2.35% UK:RDSB +2.56% RDS.A +2.35% RDS.B +2.64% jumped nearly 3%, after reporting 15.7% growth in adjusted profit for first quarter to beat analyst expectations. Fellow oil major BP PLC UK:BP +1.02% rose 1.4%.
Unilever PLC UK:ULVR +2.74% also gained, up 3%, after beating sales expectations for first quarter and saying its board recommended hiking the company’s dividend by 8% compared with a year earlier.
Sara Sjolin is a MarketWatch reporter, based in London.
