By Carla Mozee, MarketWatch
European stocks edged higher Friday, with gains for tech and
U.K.-listed shares helping to push the broader market toward a win
for the week, but bank shares were muted ahead of key earnings from
U.S. lenders.
How markets are performing
The Stoxx Europe 600 index was up 0.1% at 384.77, aided by
advances for industrial and consumer services shares, but the
telecom and oil and gas groups were lower. The index on Thursday
rose 0.8%
(http://www.marketwatch.com/story/european-stocks-stage-small-rebound-after-trade-driven-selloff-2018-07-12).
For the week, the pan-European benchmark was on course to add
0.6%, and that would mark a second straight weekly rise.
U.K. stocks put in the strongest performance, with the U.K.'s
FTSE 100 index up by 0.6% to 7,698.64. France's CAC 40 index rose
0.4% to 5,429.19, and Germany's DAX 30 index tacked on 0.1% to
12,510.16.
But Spain's IBEX was down 0.2% at 9,746.40. There, bank shares
of Banco Santander SA (SAN.MC)fell 0.6% and supermarket chain
Distribuidora Internacional de Alimentacion SA (DIA.MC) down
5%.
The euro fell to $1.1620 from $1.1671 late Thursday. The pound
traded at $1.3120, down from $1.3206.
What's driving the market
U.K.-listed shares stood out as they headed toward their sixth
win in seven trading sessions. They were largely bolstered as the
pound fell against major rivals. Sterling weakness can lift revenue
made overseas by multinational companies, which are heavily
weighted on the U.K.'s FTSE 100 index.
The pound fell after U.S. President Donald Trump, in an
interview with The Sun
(https://www.thesun.co.uk/news/6766531/trump-may-brexit-us-deal-off/)
newspaper published late Thursday, said U.K. Prime Minister Theresa
May's plan for a so-called soft Brexit would damage the likelihood
of a trade deal between Britain and the U.S.
"If they do a deal like that, we would be dealing with the
European Union instead of dealing with the U.K., so it will
probably kill the deal," said Trump, whose comments were published
as May hosted a formal dinner for Trump on Thursday night.
May's government on Thursday published a 120-page report that
provided further details on the vision for the U.K.'s future
relationship with the European Union, which was agreed at a Cabinet
meeting last week. The strategy calls for frictionless trade in
goods between the U.K. and the EU, prompting critics to say that
wouldn't amount to a clean break by the U.K. from the bloc.
Meanwhile, the Stoxx Europe 600 Banks Index was up just 0.1%
before a round of earnings from large U.S. banks were released
Friday
(http://www.marketwatch.com/story/us-stocks-poised-for-upbeat-session-as-bank-earnings-steal-center-stage-2018-07-13),
with results due from JPMorgan Chase & Co. (JPM) , Citigroup
Inc. (C) and Wells Fargo & Co. (WFC), which should help set the
tone for the new earnings season.
The Stoxx Europe 600 Technology Index moved up 0.5%, with that
group keying off Thursday's rally in tech stocks on Wall Street
(http://www.marketwatch.com/story/us-stocks-set-for-rebound-ahead-of-inflation-data-2018-07-12)
that pushed the Nasdaq Composite to its first record close since
June 20.
What strategists are saying
"Expectations [for earnings] are high, and for dominant U.S.
banks at least, prospects are solid in view of rising rates, and
unabated improvement in inflation, output, growth and the labor
market in the first half of the year. This helps account for Wall
Street's expectation of a 21% advance in earnings growth for
financials in Q2, and a close to 21% from all S&P 500 companies
as a whole," said City Index market analyst Ken Odeluga in an
note.
"With earnings expectations in Europe more modest, resignation
could be even swifter in the event of disappointment in coming
weeks," Odeluga added, who noted that expectations are for 3%
growth in net income for Stoxx 600 companies, excluding the
volatile energy-sector earnings, according to the consensus
forecast from Thomson Reuters.
"Aside from chronically sluggish utilities and amongst large
telecoms, dips in technology, and health-care sector earnings
should also be a worry," he said.
Read:Dow falls after U.S. unveils new China tariffs
(http://www.marketwatch.com/story/dow-futures-tumble-230-points-after-us-unveils-new-china-tariffs-2018-07-11)
Stock movers
Altran Technologies SA (ALT.FR) plunged 26% after the
engineering firm said it found at least $10 million in forged
purchase orders
(http://www.marketwatch.com/story/altran-finds-10-mln-in-forged-orders-at-aricent-2018-07-13)
in the accounts of Aricent, which it recently bought for 1.7
billion euros ($1.9 billion).
Hays PLC (HAS.LN) jumped 6.9% as the recruitment company said it
expects full-year operating profit to be marginally ahead of
consensus expectations
(http://www.marketwatch.com/story/hays-upbeat-on-full-year-operating-profit-2018-07-13)on
growth in most of its markets.
Siemens Healthineers AG shares (SHL.XE) fell 3% following a
ratings downgrade to hold from buy at Deutsche Bank, saying a more
than 30% rally from the initial public offering reflects prospects
for the medical technology company to deliver on its strategic
goals.
DCC PLC (DCC.LN) leapt 3.6% after the support-services group
backed its outlook for fiscal 2019
(http://www.marketwatch.com/story/dcc-buys-2-businesses-backs-profit-growth-outlook-2018-07-13)
and said it acquired two businesses for a combined value of GBP110
million ($145 million).
(END) Dow Jones Newswires
July 13, 2018 06:53 ET (10:53 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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