By Carla Mozee, MarketWatch
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European stocks fell from a six-week high Monday, with brewer Heineken NV among the companies whose shares lost ground after financial results, with troubles surrounding the technology sector and global trade weighing on markets before July dealings wrap up this week.
How markets performed
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +1.76% fell 0.3% to finish at 390.92, with tech and utilities sectors losing the most. The telecom and financial sectors was the only advancers. On Friday, the index rose 0.4% to 392.08, its strongest finish since June 14. Last week, it rose by 1.7%, the best weekly gain since March 9, FactSet data show.
Germany’s DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX +1.84% fell 0.5% for a close at 12,798.20, and France’s CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 +2.03% moved down 0.4% to 5,491.22.
Spain’s IBEX 35 /zigman2/quotes/210597995/delayed XX:IBEX +1.84% ended 0.1% lower at 9,854.10, and the U.K.’s FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +1.83% shed less than 1 point to close at 7,700.85.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.0702% rose to $1.1717 from $1.1656 late Friday in New York.
What drove markets
Regional stocks had a difficult start in the second to last trading session of July, although the Stoxx 600 was in line to rise 2.9% for the month, which would be its strongest monthly performance since April, when it climbed by 3.9%.
Investors are still wading through earnings season, which has prominently featured disappointing results from Facebook Inc. /zigman2/quotes/205064656/composite FB +0.0083% and Twitter Inc. /zigman2/quotes/203180645/composite TWTR +3.23% . Twitter’s downbeat outlook contributed to putting its stock on the skids Friday, and to pushing the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.36% down by 1.5%. The trend continued Monday.
The Stoxx Europe 600 Technology Index /zigman2/quotes/210599534/delayed XX:SX8P +0.38% forfeited 1.6% on Monday, its biggest pullback since June 28.
“The disappointing guidance from these big tech firms” is making investors question “whether FAANG stocks can continue to drive equities higher in the coming quarters, or whether it’s time to reassess their current valuations,” wrote Hussein Sayed, chief market strategist at FXTM, in a research note.
Along with earnings, investors this week will have to consider monetary-policy statements from the Bank of England, the Federal Reserve and the Bank of Japan. The BOE on Wednesday is widely expected to raise the U.K.’s key interest rate by a quarter of percentage point to 0.75%, while releasing a quarterly inflation report.
The Federal Reserve and the Bank of Japan aren’t expected to move on interest rates, but the Fed is expected to signal again that more hikes are in the pipeline. Meanwhile, there is speculation the BOJ may tweak its trademark yield-curve control policy that aims to keep the 10-year Japanese government bond yield at nearly 0%.
Last week, the European Central Bank left monetary policy unchanged and reiterated its plan to end bond purchases in December. ECB President Mario Draghi disappointed euro bulls by saying the bank still expects to stand pat on interest rates at least through the summer of 2019.