By Sara Sjolin, MarketWatch
European stocks declined on Friday, suffering a second straight weekly loss, as disappointing corporate updates and broker downgrades provided pressure.
Equities were also weighed by a stronger euro against the dollar, after the greenback stumbled on news top officials from President Donald Trump’s election campaign were subpoenaed in the Russia probe.
What did markets do?: The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.19% gave up 0.3% to close at 383.80, extending its weekly decline to 1.3%.
Germany’s DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX -0.17% dropped 0.4% to 12,993.73 on Friday, while France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.40% dropped 0.3% to 5,319.17. The U.K.’s FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.71% slipped 0.1% to 7,380.68.
What drove markets?: Traders continued to watch corporate earnings, which produced some downbeat news on Friday. Elior Group /zigman2/quotes/208428119/delayed FR:ELIOR +3.08% tumbled 18% after the catering group cut its guidance, while Carillion PLC /zigman2/quotes/208402800/delayed UK:CLLN -28.95% plunged 48% after warning that full-year profit will be “materially” lower than what the market expects.
Meanwhile, broker downgrades were also yanking some stocks lower. Zara parent Industria de Diseno Textil /zigman2/quotes/203681809/delayed ES:ITX +0.18% , or Inditex, lost 1.7% after Berenberg cut the stock to sell from hold. Fresenius SE & Co. /zigman2/quotes/202630793/delayed DE:FRE -0.79% fell 5.4% after UBS downgraded the health care company to sell from neutral. United Utilities Group PLC gave up 4.4% after HSBC cut the stock to hold from buy, according to Dow Jones Newswires.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0417% was boosted by a broad-based slide in the dollar that came after The Wall Street Journal reported that U.S. special counsel Robert Mueller’s team in mid-October issued a subpoena to more than a dozen officials from Donald Trump’s campaign, asking them to hand over Russia-related documents.
Mueller is overseeing an investigation into whether Trump associates colluded with Russia to meddle in the 2016 presidential election. Both Moscow and Trump have denied any interference.
The shared currency bought $1.1796, up from $1.1771 late Thursday in New York. A stronger euro tends to hit stocks of European exporters, as their products become more expensive for overseas buyers.
Investors in Europe also continued to track developments in Washington around the Republican tax -cut plan. The focus is now on the Senate after the House of Representatives passed a sweeping bill to overhaul the tax code on Thursday. But the Republicans’ proposed legislation has several steps to go, with immediate hurdles ahead.
A revised bill moving through the Senate Finance Committee differs in key respects from the House measure, and would delay the corporate-rate tax cut until 2019.
Other stock movers: Shares of Sky PLC rose 4.1% after reports Comcast Corp. /zigman2/quotes/209472081/composite CMCSA -1.07% and Verizon Communications Inc. /zigman2/quotes/204980236/composite VZ +0.14% are exploring bids to buy 21st Century Fox Inc.’s /zigman2/quotes/207816609/composite FOXA -0.64% stake in Sky, among other assets.
Vivendi SA /zigman2/quotes/202179234/delayed FR:VIV -0.63% rose 4.4% after positive analyst comments following the French media conglomerate’s third-quarter earnings released late Thursday.
Shares of Altice NV slid 12%, continuing a spectacular losing streak that started in early November when the company issued a poorly received trading update. The stock has lost 50% month-to-date.
Draghi in focus: European Central Bank President Mario Draghi in a speech in Frankfurt expressed confidence in the eurozone’s economic recovery, saying the region is “in the midst of a solid economic expansion.” The ECB boss cautioned, however, that inflation remains sluggish, warranting a “patient and persistent approach to our monetary policy.”