European stocks declined this morning, led by a fresh slide in Swiss stocks, as investors digested the impact of a leap in the franc after the shock lifting of a central bank currency cap yesterday. The ESTX 50 (-0.08%), Uk markets (-0.15%), CAC 40 (-0.03%) and the Dax (-0.37%) all posted small loses in early trading. Swatch and Julius Baer led a -3.5% in Zurich’s SMI Index as analysts and traders warned of a hit to Swiss exporters and investors’ returns after the franc’s rally against the euro and dollar. AstraZeneca Plc slipped -1.3% after Barclays Plc cut the shares to the equivalent of a sell rating. BP Plc added +2% after a US judge ruled it had dumped less oil into the Gulf of Mexico in 2010 than the government calculated, decreasing the maximum fine it may face. JD Sports Fashion Plc advanced +7.5% after reporting an increase in sales.
US stocks fell after several companies reported earnings that disappointed. The Dow Jones Industrial Average (-0.61%), S&P 500 (-0.92%) and the Nasdaq Composite (-1.48%) all declined. Bank of America Corp slipped -5.2% and Citigroup Inc dropped -3.7% as both banks reported a drop in fourth quarter profit as revenue from fixed income trading declined. Best Buy tumbled -14% after warning that price pressure and sluggish demand may hamper results in the coming year. Intel slumped -1.4% in late trading after forecasting first quarter sales that may fall short of analysts’ estimates, sparking concern that the PC industry is headed for a steeper decline. Apple and Hewlett-Packard Co dropped more than -2.7%. BlackBerry Ltd fell -20% after saying it hasn’t engaged in takeover talks with Samsung Electronics. Newmont Mining Corp surged +8.9% for the biggest gain in the S&P 500, after losing -6.8% the previous two days.
Asian stocks fell and equity volatility across the region increased as the Swiss central bank’s unexpected scrapping of its currency cap spurred a flight to safety. The Nikkei 225 (-1.43%), Hang Seng (-1.02%) and the S&P/ASX 200 (-0.60%) all retreated. Chugai Pharmaceutical Co, which relies on imports from Switzerland, lost -2.5% in Tokyo. Samsung C&T Corp tumbled -6.3% in Seoul amid concern over slowing overseas orders at Korean builders. Yonyou Software Co surged +10% after the State Council said this week it will set up a fund to support emerging industries. Dongfang Electric Corp led gains for industrial companies as Premier Li Keqiang said China should promote exports of nuclear power equipment. Zijin Mining Corp climbed +3.9% as gold prices rose on demand for safe havens after Switzerland decided to decouple its currency from the euro.
Morning Spread 8th March 2017 European shares traded flat this morning, the modest moves masking significant results driven games by several companies on a bust day for European earnings.
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