By Barbara Kollmeyer
European stocks and U.S. equity futures dropped on Friday, on rising COVID-19 cases and lockdown worries globally, and as optimism surrounding a leadership change at the White House ran out of steam.
The Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +2.10% fell after two straight sessions of gains, dropping 0.9% to 407.09. The German DAX /zigman2/quotes/210597999/delayed DX:DAX +3.31% fell 0.8%, with the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +2.08% down 1% and the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +1.34% losing 0.5%.
The S&P 500 /zigman2/quotes/210599714/realtime SPX -0.54% and Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -2.41% logged fresh records on the first full day in office for President Joe Biden, but Wall Street futures pointed to a pullback for Friday. S&P futures /zigman2/quotes/209948968/delayed ES00 -0.25% dipped 0.6%, while those for the Nasdaq-100 /zigman2/quotes/210219788/delayed NQ00 -2.61% fell 0.5%. Dow futures /zigman2/quotes/210407078/delayed YM00 +1.25% dropped over 200 points.
The pullback came partly amid signs the Republicans will put up resistance to Biden’s $1.9 trillion fiscal stimulus proposal. The European Central Bank, meanwhile, kept interest rates and its asset-buying program unchanged at Thursday’s meeting, but did make a slightly hawkish tweak to its policy statement.
Virus worries were front and center with Asian stocks falling, as a spike in Chinese infections sparked testing of millions in Beijing, and an urging by the government to avoid travel during February’s Lunar New Year holiday.
EU leaders, meanwhile, were unable to decide on whether to close borders at a virtual meeting on Thursday, but urged against travel between European countries . And the U.K. government indicated at a press conference on Thursday that a third lockdown could extend into the summer.
Adding to investor worries, data showed the flash eurozone purchasing managers index dropping in January to a two-month low of 47.5, coming close to the expected 47.6 — from 49.1 in December.
Among stocks on the move, virus concerns were reflected in a pullback for travel-related stocks, with shares of Anglo-German travel and tourism group TUI /zigman2/quotes/206000695/delayed XE:TUI1 +6.76% dropping nearly 8%, while airline group International Consolidated Airlines /zigman2/quotes/208070069/delayed UK:IAG +2.99% fell 2.9%, and Aéroports de Paris /zigman2/quotes/203616065/delayed FR:ADP +0.48% fell 2%. Airline Deutsche Lufthansa’s /zigman2/quotes/201210530/delayed XE:LHA +5.66% shares dropped 2%, and those for budget carrier easyJet /zigman2/quotes/202825892/delayed UK:EZJ +3.76% slid 3.8%.
Stocks geared to economic recoveries were also dropping, with automobile makers and oil companies such as Royal Dutch Shell /zigman2/quotes/205095589/composite RDS.A -1.14% /zigman2/quotes/206428183/delayed UK:RDSA -0.15% and BP /zigman2/quotes/202286639/delayed UK:BP -0.05% falling more than 1% as crude prices /zigman2/quotes/211629951/delayed CL.1 -2.13% dropped along with equities.
Shares of ProSiebenSat.1 Media /zigman2/quotes/201815951/delayed XE:PSM +4.81% rose 4%, after the broadcaster late on Thursday reported revenue and adjusted earnings that beat its own expectations and those of markets.
Siemens’ /zigman2/quotes/205905025/delayed XE:SIE +4.18% shares rose 4%, after the engineering company said late on Thursday that preliminary results for the first quarter of its financial year were mostly ahead of market expectations, and that it will now review its outlook.