By Barbara Kollmeyer
European stocks fell sharply on Friday led by technology, which followed a late-session selloff in U.S. markets. Profit warnings in the renewables sector sent the shares of two Siemens subsidiaries tumbling.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +1.22% fell close to 2% to 473.75, following a 0.5% gain on Thursday. The index is poised for a nearly 1% drop this week. The German DAX /zigman2/quotes/210597999/delayed DX:DAX +1.59% tumbled 2.2%, with the CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +1.30% down 2% and the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.72% 1.3% lower.
U.S. stock indexes surrendered an early rebound to turn lower in Thursday’s final hour of trading , a repeat of Wednesday’s volatile session. The worst losses were seen for the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +2.76% , which fell 1.3%, pushing it further into correction territory.
Stocks have struggled at the start of the year amid a selloff in bonds as investors look ahead to tighter policy from Federal Reserve. The yield on the 10-year /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -0.14% fell 5 basis points to 1.75%, while the yield on the German 10-year bund /zigman2/quotes/211347112/realtime BX:TMBMKDE-10Y +12.09% , which pushed into positive territory for the first time in three years this week, slipped 5 basis points to negative 0.07%.
A bumpy start to earnings season has also added to the gloom, with Netflix /zigman2/quotes/202353025/composite NFLX +2.17% shares dropping 20% on Friday, after the streaming giant’s subscriber number outlook fell far short of expectations . U.S. stocks /zigman2/quotes/210598065/realtime DJIA +1.34% /zigman2/quotes/210598365/realtime COMP +2.76% /zigman2/quotes/210599714/realtime SPX +2.02% opened mixed.
No Europe sectors were in the green, while financials and technology sectors led. Heavily weighted ASML Holding /zigman2/quotes/210293876/composite ASML +4.99% /zigman2/quotes/206208657/delayed NL:ASML +3.12% dropped 3%, and ams /zigman2/quotes/204183137/delayed AT:AMS 0.00% shares fell 3%, while business software group SAP /zigman2/quotes/202053813/delayed XE:SAP +0.75% was down 1.2%.
Energy names were under pressure as a risk-off mood hit oil prices /zigman2/quotes/209723049/delayed CL00 +0.85% , and BP /zigman2/quotes/202286639/delayed UK:BP +0.69% /zigman2/quotes/207305210/composite BP +1.48% and Royal Dutch Shell shares fell more than 2% each.
The renewables sector was suffering severe losses, after Siemens Gamesa Renewable Energy /zigman2/quotes/205820667/delayed ES:SGRE +5.45% late Thursday cut its guidance for the fiscal year , swinging to an operating loss in the first quarter on continued supply-chain woes. Shares slumped 13%.
The warning from its Spanish subsidiary prompted Siemens Energy /zigman2/quotes/221435471/delayed XE:ENR +1.42% to lower its targets for fiscal 2022 , and shares tumbled 16%. Those of rival Vestas Wind Systems /zigman2/quotes/205019303/delayed DK:VWS +2.06% dropped 6%.
Elsewhere, shares of Airbus /zigman2/quotes/208224336/delayed FR:AIR +2.31% dropped 1.5%, after the multinational aerospace corporation canceled a plane order from state-owned carrier Qatar as the two companies have been in dispute for months over surface degradation on A350 jets.