By Steve Goldstein, MarketWatch
A previous version of this story had an incorrect level for the Stoxx 600.
European stocks closed higher but well off their best levels of Tuesday, as drugmakers gained ground but banks struggled in wake of a decision by the U.S. Federal Reserve to cut interest rates by a half percentage point.
Up as high as 387.54 earlier, the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +1.23% advanced 1.4% to 381.13. Pharmaceutical companies including Novartis /zigman2/quotes/203286410/delayed CH:NOVN -0.07% led the advance, with food producers also gaining ground.
European stocks were still playing catch-up to the 4.6% surge in the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.05% on Monday.
The Fed’s rate cut put pressure as lenders on concern over net interest margins. ABN Amro /zigman2/quotes/209088556/delayed NL:ABN +0.29% , Deutsche Bank /zigman2/quotes/205584254/delayed DE:DBK +1.41% and Societe Generale /zigman2/quotes/206663756/delayed FR:GLE +1.82% all fell sharply.
The European Central Bank has said it’s willing to take “appropriate and targeted” measures, with expectations the Bank of England will further cut interest rates. “I think it’s up to individual countries, individual fiscal policies and individual central banks to do what they are going to do. I would think it will be, it’s possible there will be some more formal coordination as a move forward,” said Federal Reserve Chairman Jerome Powell at a press conference.
According to the Johns Hopkins tracker of Covid-19 cases, there are 90,937 confirmed cases globally, including more than 10,000 outside of China.
The backdrop also includes the Super Tuesday voting in the U.S. Democratic primary, where former Vice President Joe Biden has received a number of endorsements from former rivals as he vies against Sen. Bernie Sanders, the Vermont independent who has proposed an entirely public health-insurance system.
Of stocks on the move, Qiagen /zigman2/quotes/208965936/delayed DE:QIA +0.28% /zigman2/quotes/204869908/composite QGEN +0.46% shares surged 17% to 37.12 euros after Thermo Fisher Scientific /zigman2/quotes/201150432/composite TMO +1.12% said it would buy the diagnostics company for 39 euros per share in cash, which is a 23% premium to Monday’s close. The deal values Qiagen at $11.5 billion, including the assumption of $1.4 billion of debt.
German wholesaler Metro /zigman2/quotes/207598928/delayed DE:B4B -1.10% surged 19% on a report from Bloomberg News that Sysco /zigman2/quotes/205335941/composite SYY -0.05% has approached it about a possible takeover.