(Bloomberg) — European stocks struggled to advance Wednesday, with a rally in technology stocks barely keeping the benchmark afloat amid disappointing earnings in the banking and luxury goods sectors.
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The Stoxx Europe 600 edged up around 0.1% after its biggest two-day gain since November. The technology subindex climbed 2.3%, bringing its gain this week to 5%. ASM International NV jumped after orders beat expectations, with chipmakers also welcoming an upbeat outlook from U.S. peer Texas Instruments Inc.
Banks weighed on the index, with Lloyds Banking Group Plc falling after missing estimates for loan revenue. Svenska Handelsbanken AB fell 11% after Sweden’s largest property lender missed analysts’ profit estimates. Kering SA fell, dragging its rivals in the luxury sector lower, after warning that its profits would fall due to slowing sales of Gucci, its biggest brand.
U.S. stock futures rose, with contracts on the Nasdaq 100 outperforming. Tesla Inc.’s gains alone accounted for about a third of the rise in Nasdaq futures, according to data compiled by Bloomberg. The electric car maker jumped more than 10% in pre-market trading after accelerating the launch of cheaper cars in a bid to revive flagging demand. Texas Instruments rose more than 6%.
Along with the strong performance of U.S. tech giants in Tuesday’s Wall Street rally, weak measures of business activity in the world’s largest economy also helped keep expectations of policy easing alive. the Federal Reserve this year. The 10-year Treasury yield rose and the dollar indicator remained stable.
The S&P 500 recorded its best consecutive rally in two months. Nvidia Corp., a poster child for the artificial intelligence boom, has led a wave of chipmakers. Texas Instruments Inc. gave bullish revenue forecasts – a good sign for the chip industry that helped lift Asian and European producers on Wednesday.
Among other company results and news that influenced European stocks on Wednesday:
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Shares of Evotec SE fell as much as 31% after the German pharmaceutical company’s annual results showed weak guidance.
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Volvo Car AB fell 8.8% after the Swedish automaker missed its first-quarter profit estimates.
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Roche Holding AG fell as much as 3% after cutting its pipeline of experimental drugs as its new chief executive tries to revive growth after a series of research setbacks.
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Reckitt Benckiser Group Plc rose 5.8% after the consumer health giant posted positive sales surprises.
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Kone Oyj rose after the elevator maker reported first-quarter results that largely met expectations.
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Shares of Heineken NV rose after the brewer reported first-quarter organic beer volume and organic revenue that beat estimates.
Oil held its advance as an industry report showed a decline in U.S. crude inventories and traders tracked progress toward new sanctions on Iran. Gold rose slightly.
Elsewhere, the yen remained inches from the key level of 155 to the dollar as a former top Japanese foreign exchange official warned the country was on the brink of monetary intervention.
Earnings under surveillance
In late US hours, Tesla soared as the electric vehicle giant struck an upbeat tone despite a sales failure, the first of the ‘Magnificent Seven’ megacaps to report. The stock halted its seven-day slide, climbing alongside the rest of the group.
Besides Tesla, Microsoft Corp., Meta Platforms Inc. and Alphabet Inc. are also expected to report results this week. Profits from the “Magnificent Seven” group – which also includes Apple Inc., Amazon.com Inc. and Nvidia Corp. – are expected to rise about 40% in the first quarter compared to last year, according to Bloomberg Intelligence data.
The tech mega-cap group is crucial to the S&P 500 since the companies have the heaviest weightings in the benchmark index. After this year’s advance, valuations have become high. After the latest selloff, the Magnificent Seven was still trading at a total of 31 times forward earnings, according to data compiled by Bloomberg.
Key events this week:
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Results from IBM, Boeing and Meta Platforms, Wednesday
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Malaysia CPI, Thursday
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South Korea’s GDP on Thursday
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Turkey rate decision on Thursday
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US GDP, wholesale stocks, initial jobless claims, Thursday
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Results from Microsoft, Alphabet, Airbus, Caterpillar, Thursday
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Japan rate decision, Tokyo CPI, inflation and GDP forecasts, Friday
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Personal income and spending in the United States, consumer sentiment from the University of Michigan, Friday
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Exxon Mobil, Chevron results, Friday
Some of the main market movements:
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The Stoxx Europe 600 rose 0.1% at 9:41 a.m. London time
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S&P 500 futures rose 0.2%
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Nasdaq 100 futures rose 0.6%
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Dow Jones Industrial Average futures little changed
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The MSCI Asia-Pacific index rose 1.7%
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The MSCI Emerging Markets Index rose 1.6%
Currencies
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Bloomberg Dollar Spot Index little changed
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The euro fell 0.2% to $1.0684
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The Japanese yen was little changed at 154.89 per dollar
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The offshore yuan was little changed at 7.2661 per dollar.
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The British pound fell 0.2% to $1.2426.
Cryptocurrencies
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Bitcoin rose 0.3% to $66,556.51
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Ether rose 1.3% to $3,249.9
Obligations
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The 10-year Treasury yield rose three basis points to 4.63%
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The German 10-year yield rose three basis points to 2.53%
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The UK 10-year yield rose five basis points to 4.29%
Raw materials
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Brent crude fell 0.1% to $88.32 a barrel
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Spot gold fell 0.2% to $2,317.67 an ounce
This story was produced with the help of Bloomberg Automation.
–With help from Winnie Hsu, Michael Msika and Jan-Patrick Barnert.
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