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Jan. 15, 2021, 11:08 a.m. EST

European stocks fall as Biden’s stimulus plan fails to cheer COVID-19 worried investors

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By Barbara Kollmeyer

European stocks fell on Friday as the announcement of a highly anticipated stimulus plan from President-elect Joe Biden failed to cheer investors, who remain concerned over climbing COVID-19 cases on both sides of the Atlantic.

The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP -0.02% fell 0.9% in a week that has seen it drop around 1%. The German DAX /zigman2/quotes/210597999/delayed DX:DAX +0.01% and French CAC /zigman2/quotes/210597958/delayed FR:PX1 +0.08% dropped 1.2% each and the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.27% traded 1% lower. The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.1442% and pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.0165% were both weaker against the dollar.

Biden announced a $1.9 trillion coronavirus relief plan that includes increasing direct cash payments to Americans to $2,000 and money for distributing COVID-19 vaccines. U.S. stocks were under pressure in early trading as data also showed retail sales fell a third straight month.

“The President-elect also made clear that he would be laying a second, broader economic recovery plan in February at a joint session of Congress. That plan will lay out infrastructure spending and plans to attack climate change. It seems it will also lay out tax raising plans which is catching the market off guard a little this morning,” said a team of strategists at Deutsche Bank led by Jim Reid.

Investors are grappling with a third wave of COVID-19 cases, and concerns as even China finds itself dealing with a resurgence in cases and hospitalizations. The U.S. now has a quarter of the global tally of new cases, or 23 million infections.

In Europe, France will impose a nationwide 6 p.m. curfew on Saturday , with initial plans for 15 days to battle climbing cases. Spain reported 38,869 new coronavirus infections on Wednesday , the highest on record and three times the worst level seen in the first wave, with hospitalizations rising.

“There is renewed enthusiasm about the U.S. due to the prospects for more stimulus and the new administration’s pledge to focus on the vaccinations’ rollout. Meanwhile, Europe recovery is throttled by additional lockdowns and a fumbled vaccine rollout program,” said Stephen Innes, chief global markets strategist at Axi, in a note to clients.

The U.K.’s Office for National Statistics reported that the country’s economy shrank 2.6% in November, after six straight months of growth since lockdowns in the spring. But that was less than the 4% drop forecast by economists polled by The Wall Street Journal.

Friday’s selloff was focused on companies that are geared toward economic recoveries, such as commodity plays. Oil prices, which have also benefited from the rally, fell over 1%, dragging down shares of heavily weighted BP /zigman2/quotes/202286639/delayed UK:BP +0.99% /zigman2/quotes/207305210/composite BP +0.83% , Royal Dutch Shell down more than 1% each and Total off 2.7%. And big mining stocks such as Rio Tinto /zigman2/quotes/208934945/delayed UK:RIO -0.52% /zigman2/quotes/202627887/composite RIO -0.62% were also under pressure.

Earning season is slowly revving up in the U.S. and Europe, with JPMorgan /zigman2/quotes/205971034/composite JPM +0.19% among the big banks that reported on Friday. The bank’s shares fell 2.5% even after results topped estimates .

Read: Expect another quarter of big earnings beats, as Wall Street estimates were likely overly depressed

An early gainer, SAP /zigman2/quotes/207905606/composite SAP +0.73% /zigman2/quotes/202053813/delayed XE:SAP +0.53% slipped into the red by afternoon. The German software giant pre-announced fourth-quarter results , reporting a sequential improvement “even as the COVID-19 crisis persisted and lockdowns were reintroduced in many regions.”

Carrefour’s /zigman2/quotes/208564127/delayed FR:CA -0.15% shares were again on the decline, dropping 3% after the French government voiced objections to prospects of a takeover for the supermarket owner when it and Canada’s Alimentation Couche-Tard  announced early-stage talks earlier in the week.

Shares of information-technology company Aveva /zigman2/quotes/202038414/delayed UK:AVV +0.25% surged 5.7%, after it said revenue growth rose in the first nine months of fiscal 2021 and that it was confident in its full-year outlook.

/zigman2/quotes/210599654/delayed
XX : STOXX
440.73
-0.11 -0.02%
Volume: 0.00
Nov. 25, 2022 11:03p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
14,541.38
+1.82 +0.01%
Volume: 46,218
Nov. 25, 2022 6:30p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
6,712.48
+5.16 +0.08%
Volume: 47,928
Nov. 25, 2022 6:05p
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,486.67
+20.07 +0.27%
Volume: 445,496
Nov. 25, 2022 4:57p
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/zigman2/quotes/210561242/realtime/sampled
US : Tullett Prebon
1.0415
+0.0015 +0.1442%
Volume: 0.0000
Nov. 25, 2022 4:59p
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/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.2091
-0.0002 -0.0165%
Volume: 0.0000
Nov. 25, 2022 4:59p
loading...
/zigman2/quotes/202286639/delayed
UK : U.K.: London
488.35 p
+4.80 +0.99%
Volume: 24.86M
Nov. 25, 2022 4:35p
P/E Ratio
N/A
Dividend Yield
4.07%
Market Cap
£88.37 billion
Rev. per Employee
£2.66M
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/zigman2/quotes/207305210/composite
US : U.S.: NYSE
$ 35.27
+0.29 +0.83%
Volume: 3.51M
Nov. 25, 2022 1:10p
P/E Ratio
N/A
Dividend Yield
3.84%
Market Cap
$106.88 billion
Rev. per Employee
$3.38M
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/zigman2/quotes/208934945/delayed
UK : U.K.: London
5,379.00 p
-28.00 -0.52%
Volume: 1.18M
Nov. 25, 2022 4:35p
P/E Ratio
6.58
Dividend Yield
9.82%
Market Cap
£89.03 billion
Rev. per Employee
£917,806
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/zigman2/quotes/202627887/composite
US : U.S.: NYSE
$ 65.73
-0.41 -0.62%
Volume: 1.08M
Nov. 25, 2022 1:10p
P/E Ratio
6.03
Dividend Yield
10.39%
Market Cap
$107.68 billion
Rev. per Employee
$1.23M
loading...
/zigman2/quotes/205971034/composite
US : U.S.: NYSE
$ 136.74
+0.26 +0.19%
Volume: 3.22M
Nov. 25, 2022 1:10p
P/E Ratio
11.54
Dividend Yield
2.93%
Market Cap
$401.09 billion
Rev. per Employee
$512,134
loading...
/zigman2/quotes/207905606/composite
US : U.S.: NYSE
$ 110.65
+0.80 +0.73%
Volume: 411,187
Nov. 25, 2022 3:30p
P/E Ratio
36.91
Dividend Yield
1.35%
Market Cap
$130.15 billion
Rev. per Employee
$306,804
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/zigman2/quotes/202053813/delayed
XE : Germany: Xetra
106.02
+0.56 +0.53%
Volume: 1.40M
Nov. 25, 2022 6:30p
P/E Ratio
38.95
Dividend Yield
1.84%
Market Cap
€125.06 billion
Rev. per Employee
€283,163
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/zigman2/quotes/208564127/delayed
FR : France: Euronext Paris
16.55
-0.03 -0.15%
Volume: 993,725
Nov. 25, 2022 5:35p
P/E Ratio
12.51
Dividend Yield
3.14%
Market Cap
€12.12 billion
Rev. per Employee
€247,292
loading...
/zigman2/quotes/202038414/delayed
UK : U.K.: London
3,191.00 p
+8.00 +0.25%
Volume: 914,570
Nov. 25, 2022 4:35p
P/E Ratio
N/A
Dividend Yield
1.18%
Market Cap
£9.63 billion
Rev. per Employee
£194,051
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