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April 29, 2020, 5:04 a.m. EDT

European stocks struggle amid earnings deluge, but banks and oil companies rise

IAG tumbles after BA announces 12,000 job cuts

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By Barbara Kollmeyer, MarketWatch


Reuters
Oil companies get boost from crude.

European stock markets struggled for traction on Wednesday, as a mostly downbeat batch of earnings rolled out and investors waited for the outcome of a Federal Reserve meeting later.

The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.88%  was flat at 340.94, after closing up 1.7% on Tuesday for a second-straight day of gains. Also flat were the German DAX index /zigman2/quotes/210597999/delayed DX:DAX +1.15% and the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +1.01% , outpaced by the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.76% , which rose 0.4%. 

The FTSE Italy MIB index /zigman2/quotes/210598024/delayed IT:I945 +1.34%  rose 0.3%, taking a surprise downgrade from Fitch Ratings in stride. The country’s sovereign credit rating by one notch to BBB-, though with a stable outlook.

“Fitch forecasts an 8% GDP contraction in 2020 and the risks to this baseline forecast are tilted to the downside, as it assumes that the coronavirus can be contained in 2H20 [second half of 2020], leading to a relatively strong economic recovery in 2021,” the ratings agency said.

Italy has announced a number of measures will be lifted on the country after its devastating battle with the virus, while Spain and France are announcing new plans for scaling back restrictions on Tuesday. Hopes that global economies can get back up and running have been driving a stock recovery since the mid-March meltdown as pandemic fears surged. The Stoxx Europe 600 is up nearly 22% from a March 18, 2020, low.

Dow Jones Industrial Average futures /zigman2/quotes/210407078/delayed YM00 +1.58%  rose ahead of a busy earnings day, first-quarter gross domestic product data, and the conclusion of a two-day Federal Reserve meeting. Given the unprecedented financial support the central bank has thrown at the economy to fight the pandemic, investors will be looking for supportive comments from Fed Chairman Jerome Powell and confidence that the U.S. can overcome the crisis.

The European Central Bank will meet on Thursday. “It seemingly has limited policy space yet is facing a need to provide stimulus and support, while not shouldering all the burden,” said John Velis, foreign exchange and macro strategist at BNY Mellon.

Airlines were in a grim spotlight after British Airways said on Tuesday that it will cut 12,000 jobs, after parent International Consolidated Airlines Group /zigman2/quotes/208070069/delayed UK:IAG +2.02%  said it had begun a restructuring and layoff program, warning it will take “several years” for passenger demand to return to 2019 levels.

Shares of IAG slid 4%, but elsewhere the sector saw gains or modest losses, with Ryanair Holdings /zigman2/quotes/205429530/delayed IE:RY4C +0.62%  and easyJet /zigman2/quotes/202825892/delayed UK:EZJ +1.72%  up 2% each, and Deutsche Lufthansa /zigman2/quotes/205496028/delayed DE:LHA -0.87%  down 0.4%.

Major energy groups rose in step with oil prices, with U.S. crude /zigman2/quotes/211629951/delayed CL.1 +2.20%  climbing 14% ahead of a key supply report from the Energy Information Administration. The American Petroleum Institute reported late on Tuesday that U.S. crude supplies rose by 9.98 million barrels for the week ended April 24, according to sources. But that gain was reportedly less than expected.

Shares of Royal Dutch Shell Group /zigman2/quotes/205095589/composite RDS.A +2.97%   /zigman2/quotes/206428183/delayed UK:RDSA +1.23%  climbed 2.6%, while those of BP /zigman2/quotes/207305210/composite BP +1.86%   /zigman2/quotes/202286639/delayed UK:BP +0.28%  gained 3.4%.

Barclays /zigman2/quotes/208409333/delayed UK:BARC +5.18%   /zigman2/quotes/206581728/composite BCS +7.32%  shares soared 5%. The bank said profit fell in the first quarter as it set aside £2.1 billion ($2.6 billion) in provisions for losses from loans affected by the coronavirus pandemic.

Shares of Deutsche Bank /zigman2/quotes/203042512/composite DB +3.91%   /zigman2/quotes/205584254/delayed DE:DBK +3.42%  rose 1.8% after reporting a sharp fall in after-tax profit in the first quarter, but beat expectations due to strong performance at its investment bank.

AstraZeneca /zigman2/quotes/203048482/delayed UK:AZN +0.29%   /zigman2/quotes/200304487/composite AZN -0.39%  was a bright spot, up 1.3% after the drugmaker reported higher sales and earnings for the first quarter, due to consumers stockpiling medicines amid the pandemic.

Ams /zigman2/quotes/205647546/delayed CH:AMS +6.07%  shares surged 15% after the sensor technology company posted a wider net loss, but surge in revenue. The company said it expects a “very solid business performance” for the second quarter.

/zigman2/quotes/210599654/delayed
XX : STOXX
366.83
+3.19 +0.88%
Volume: 0.00
July 10, 2020 5:50p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
12,633.71
+144.25 +1.15%
Volume: 72,727
July 10, 2020 6:30p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
4,970.48
+49.47 +1.01%
Volume: 82,357
July 10, 2020 6:05p
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,095.41
+45.79 +0.76%
Volume: 666,498
July 10, 2020 4:59p
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/zigman2/quotes/210598024/delayed
IT : Borsa Italiana
19,767.60
+261.65 +1.34%
Volume: 0.00
July 10, 2020 5:35p
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/zigman2/quotes/210407078/delayed
US : U.S.: CBOT
$ 25,976.00
+405.00 +1.58%
Volume: 227,217
July 10, 2020 3:09p
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/zigman2/quotes/208070069/delayed
UK : U.K.: London
211.70 p
+4.20 +2.02%
Volume: 12.47M
July 10, 2020 4:35p
P/E Ratio
2.86
Dividend Yield
4.97%
Market Cap
£4.12 billion
Rev. per Employee
N/A
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/zigman2/quotes/205429530/delayed
IE : Ireland: Dublin
10.50
+0.07 +0.62%
Volume: 1.88M
July 10, 2020 4:30p
P/E Ratio
18.18
Dividend Yield
N/A
Market Cap
€11.37 billion
Rev. per Employee
€530,769
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/zigman2/quotes/202825892/delayed
UK : U.K.: London
664.00 p
+11.20 +1.72%
Volume: 2.41M
July 10, 2020 4:35p
P/E Ratio
10.92
Dividend Yield
6.61%
Market Cap
£2.84 billion
Rev. per Employee
N/A
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/zigman2/quotes/205496028/delayed
DE : Germany: Frankfurt
8.68
-0.08 -0.87%
Volume: 67,111
July 10, 2020 8:58p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€264,465
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/zigman2/quotes/211629951/delayed
US : U.S.: Nymex
$ 40.49
+0.87 +2.20%
Volume: 363,286
July 10, 2020 4:09p
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/zigman2/quotes/205095589/composite
US : U.S.: NYSE
$ 32.21
+0.93 +2.97%
Volume: 6.22M
July 10, 2020 4:00p
P/E Ratio
13.31
Dividend Yield
8.29%
Market Cap
$118.56 billion
Rev. per Employee
$4.75M
loading...
/zigman2/quotes/206428183/delayed
UK : U.K.: London
1,246.40 p
+15.20 +1.23%
Volume: 3.33M
July 10, 2020 4:35p
P/E Ratio
12.86
Dividend Yield
4.07%
Market Cap
£93.98 billion
Rev. per Employee
N/A
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/zigman2/quotes/207305210/composite
US : U.S.: NYSE
$ 22.46
+0.41 +1.86%
Volume: 12.81M
July 10, 2020 4:00p
P/E Ratio
18.78
Dividend Yield
11.00%
Market Cap
$73.54 billion
Rev. per Employee
$4.03M
loading...
/zigman2/quotes/202286639/delayed
UK : U.K.: London
290.80 p
+0.80 +0.28%
Volume: 38.47M
July 10, 2020 4:35p
P/E Ratio
N/A
Dividend Yield
11.45%
Market Cap
£58.29 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/208409333/delayed
UK : U.K.: London
117.76 p
+5.80 +5.18%
Volume: 32.94M
July 10, 2020 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£19.40 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/206581728/composite
US : U.S.: NYSE
$ 6.01
+0.41 +7.32%
Volume: 4.19M
July 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
2.40%
Market Cap
$24.48 billion
Rev. per Employee
$458,292
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/zigman2/quotes/203042512/composite
US : U.S.: NYSE
$ 10.10
+0.38 +3.91%
Volume: 4.69M
July 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$20.09 billion
Rev. per Employee
$493,032
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/zigman2/quotes/205584254/delayed
DE : Germany: Frankfurt
8.90
+0.29 +3.42%
Volume: 66,037
July 10, 2020 8:58p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€417,912
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/zigman2/quotes/203048482/delayed
UK : U.K.: London
8,505.00 p
+25.00 +0.29%
Volume: 1.38M
July 10, 2020 4:35p
P/E Ratio
93.22
Dividend Yield
2.57%
Market Cap
£111.28 billion
Rev. per Employee
N/A
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/zigman2/quotes/200304487/composite
US : U.S.: NYSE
$ 53.76
-0.21 -0.39%
Volume: 5.35M
July 10, 2020 4:00p
P/E Ratio
103.42
Dividend Yield
2.55%
Market Cap
$140.39 billion
Rev. per Employee
$342,432
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/zigman2/quotes/205647546/delayed
CH : Switzerland: SWX
CHF 16.35
+0.94 +6.07%
Volume: 3.73M
July 10, 2020 5:31p
P/E Ratio
6.61
Dividend Yield
N/A
Market Cap
CHF4.18 billion
Rev. per Employee
N/A
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Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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