EUROPE MARKETS: DAX Drops 1.5% After Lift In Bond Yields Spooks Wall Street
April 25 2018 - 5:11AM
Dow Jones News
By Carla Mozee, MarketWatch
Credit Suisse shares rally after earnings
Investors shoved European stocks sharply lower Wednesday in the
wake of a selloff on Wall Street where equities were spoked by
rising bond yields and downbeat outlooks from industrial
heavyweights.
How markets are moving
Germany's DAX 30 index was the worst performing among national
indexes. It fell 1.5% to 12,347.75, with only shares of Linde AG
(LINU.XE) showing a gain. France's CAC 40 index declined 0.6% to
5,410.40.
Spain's IBEX 35 lost 0.7% to 9,812.50 and the U.K.'s FTSE 100
shed 0.7% to 7,375.53, on course to break a six-session winning
streak
(http://www.marketwatch.com/story/ftse-100-drops-after-rising-bond-yields-spur-selloff-on-wall-street-2018-04-25).
The broader Stoxx Europe 600 index sank 1% to 379.45, pulling
away from their highest levels since early February. The benchmark
on Tuesday gave up gains and
(http://www.marketwatch.com/story/european-stocks-hold-at-2-month-highs-as-energy-names-rally-2018-04-24)ended
fractionally lower.
The euro was buying $1.2211, up from $1.2233 late Tuesday in New
York.
The yield on Germany's 10-year bund rose 1 basis point to
0.641%, according to Tradeweb data, as prices fell.
Check out:Why the premium for German bonds over Treasurys is the
widest in 30 years
(http://www.marketwatch.com/story/why-the-premium-for-owning-german-bonds-over-treasurys-is-at-the-widest-in-30-years-2018-04-23)
What's driving the market
European , U.K. and Asian stock markets took their cues from a
slide in U.S. stocks on Tuesday
(http://www.marketwatch.com/story/dow-shapes-up-to-break-losing-streak-but-earnings-could-kill-the-buzz-2018-04-24),
which was led by declines in shares of industrial, basic materials
and technology companies. The Dow Jones Industrial Average sank 424
points, or 1.7%, and the S&P 500 index gave up 1.3%.
U.S. stocks were driven sharply lower after the U.S. 10-year
Treasury yield climbed and touched the psychologically important 3%
level for the first time in four years
(http://www.marketwatch.com/story/yields-pull-back-as-us-10-year-government-bond-march-to-3-stalls-2018-04-24).
Meanwhile, shares of industrial heavyweights dropped, with
construction equipment maker Caterpillar Inc. (CAT) saying the
first quarter was likely the "high watermark" for the year. Also,
3M Co. shares (MMM) plunged after the company trimmed its full-year
outlook
(http://www.marketwatch.com/story/3ms-stock-tumbles-into-a-bear-market-after-most-disappointing-results-in-over-a-decade-2018-04-24).
U.S. bond yields have been rising on expectations that
inflationary pressures could prompt the Federal Reserve to ramp up
the pace of rate hikes, which would increase borrowing costs for
companies and consumers. European bond yields have also been
creeping higher. Higher yields can weigh on stocks as bonds start
to offer better returns than equities and raise borrowing
costs.
Read:What it means for the market that the U.S. 10-year
government bond yield hit 3%
(http://www.marketwatch.com/story/heres-what-it-means-for-the-market-that-the-us-10-year-yields-3-2018-04-24)
Stocks in focus
Osram Licht AG shares (OSR.XE) tumbled 10% after the German
lighting maker late Tuesday cut its full-year target on earnings
before interest, taxes, depreciation and amortization.
Kering SA (KER.FR) bounced 6.1% higher as the luxury goods maker
said first-quarter revenue jumped 27%
(http://www.marketwatch.com/story/kering-revenue-soars-as-gucci-keeps-up-success-2018-04-25),
led by its flagship Gucci brand and "exceptional momentum" at
Balenciaga.
Credit Suisse Group AG shares (CSGN.EB) (CSGN.EB) rose 3.9% as
the Swiss lender said first-quarter net profit grew roughly 16%
(http://www.marketwatch.com/story/credit-suisse-profit-up-16-beating-forecasts-2018-04-25)
to 694 million Swiss francs ($709.1 million), beating expectations
of 653 million Swiss francs.
"With these first-quarter results, we got off to a good start in
our third and final year of restructuring," said Chief Executive
Tidjane Thiam said in a statement.
Metro Bank PLC shares (MTRO.LN) slid 10% as the U.K.-based
lender said its first-quarter profit increased more than fivefold
to GBP6.4 million ($8.9 million), but that its capital position has
weakened
(http://www.marketwatch.com/story/metro-bank-profit-soars-capital-ratio-falls-2018-04-25).
Shire PLC shares (SHPG) (SHPG) fell 1.4%, turning lower in
Wednesday trade. The drug maker recommended shareholders accept
(http://www.marketwatch.com/story/shire-seems-ready-to-accept-latest-takeda-offer-2018-04-24)
an improved takeover bid from Takeda Pharmaceutical Co.
(4502.TO)
(END) Dow Jones Newswires
April 25, 2018 05:56 ET (09:56 GMT)
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