January 14, 2014 / 6:25 AM / 4 years ago

Europe Factors to Watch-Shares set to track Wall Street selloff

PARIS, Jan 14 (Reuters) - European stocks were set to fall on Tuesday,
tracking sharp losses on Wall Street following a number of disappointing
earnings and outlook statements which raised concern about profit growth.
    At 0709 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were down 0.7-0.9
    The Dow Jones industrial average fell 1.1 percent, the S&P 500 
lost 1.3 percent and the Nasdaq Composite dropped 1.5 percent after a
number of mid-sized companies including SodaStream, Lululemon Athletica
, Express Inc and Aaron's posted weak earnings or
forecasts on Monday.
    According to Thomson Reuters data, almost 10 out of every 11 companies that
have had pre-announcements for the current earnings season from S&P 500
companies have lowered estimates.
    "We've been focusing a lot on macro data, but the real test is coming, with
the earnings season starting, and the market might have been too optimistic
about earnings recovery," a Paris-based equity and exchange-traded funds (ETFs)
trader said.
    The focus will be on JPMorgan and Wells Fargo, set to post
quarterly results before the opening bell on Wall Street on Tuesday.
    On the M&A front, shares in German drugs distributor Celesio were
indicated 12.5 percent lower in premarket trade after suitor McKesson 
failed to garner enough shares for its takeover bid to succeed. 
    French equities will also be in the spotlight as President Francois Hollande
is set to unveil plans to revive the weak French economy at a news conference on
    So far this year, France's blue-chip stock index CAC 40 is down 0.8
percent, the worst performance among European bourses in 2014 and a sharp
contrast with euro zone peripheral markets, with Spain's IBEX up 4.4
percent, Italy's FTSE MIB up 3.8 percent, Portugal's PSI 20 up
8.9 percent and Greece's ATG up 11 percent. (graphic:).
    "With President Hollande's popularity at record lows in the polls and the
current status quo looking increasingly unsustainable, we think the French
President is on the eve of implementing a policy shift as radical as that made
in 2003 by German Chancellor Schroeder with his 'Agenda 2010' and French
President Mitterrand's game changer in March 1983," Alain Bokobza, head of
global asset allocation strategy at Societe Generale CIB, wrote in a note.
    "From a market perspective, an acceleration of spending cuts to reduce
corporate taxes should be welcomed by the equity market and keep the CAC 40 on
track to reach our forecast of 5,100 by year-end."
                                        LAST         PCT CHG    NET CHG
 S&P 500                                1,819.20     -1.26 %    -23.17
 NIKKEI                                 15,422.40    -3.08 %    -489.66
 MSCI ASIA EX-JP                        457.71       -0.66      -3.02
 EUR/USD                                1.3657       -0.1 %     -0.0014
 USD/JPY                                103.37       0.38 %     0.3900
 10-YR US TSY YLD                       2.838        --         0.01
 10-YR BUND YLD                         1.806        --         -0.01
 SPOT GOLD                              $1,252.88    -0.01 %    -$0.18
 US CRUDE                               $92.01       0.23 %     0.21
  > GLOBAL MARKETS-Japanese stocks tumble as yen hits 4-week high 
  > US STOCKS-Wall St slides on caution ahead of earnings 
  > Tokyo's Nikkei share average closes down 3.08 pct 
  > FOREX -Yen takes breather as short-covering rally loses steam 
  > Gold near 1-mth high as dollar, stocks drop on US growth fears 
  > METALS-LME copper edges up, traders wary on growth 
  > Brent slips towards $106 as supply outlook brightens 
    U.S. drugs wholesaler group McKesson said on Monday it had failed to
win enough support for a $8.4 billion offer to buy German distributor Celesio,
leaving it empty-handed in a sector where cross-border consolidation is
The Swiss chocolate maker said market share gains in all major markets and
product categories helped its full-year sales rise 8.6 percent, ahead of overall
market growth and analyst expectations. 
The sanitary equipment maker said sales rose 4.8 percent to 525.3 million Swiss
francs in the fourth quarter, meeting expectations. The group said its EBITDA
margin should have risen to between 25 and 26 percent in 2013. 
The top executive at Daimler said on Monday the German automaker was likely to
achieve its cost-savings target earlier than expected - and he declined to rule
out the possibility the savings might exceed the company's goals. 
The companies have reached an agreement with the Belgian government on the
10-year extension of the Tihange 1 reactor, Les Echos said.
Sergio Marchionne has pledged to stay on as chief executive of Fiat-Chrysler for
at least three years to see through the full merger of the Italian carmaker and
its U.S. business, and a new strategy to turn around its loss-making operations
in Europe. 
The bank said on Monday its consumer credit unit, Consum.it, had sold a loan
portfolio worth 551 million euros as part of a broader restructuring plans.
The Italian small-sized lender, which has been put under special administration
by the Bank of Italy, denied on Monday it had reached a deal to be bought by
peer Banco di Desio e della Brianza.
    Germany's banks have made little progress on efforts to curb bonuses of top
managers ahead of new European rules designed to control the type of risky
behaviour that fuelled the financial crisis, the country's financial watchdog
said on Monday. 
    Spanish construction firm Sacyr's dispute over work on the expansion of the
Panama Canal will not have a significant impact on the company's earnings and is
not putting its solvency at risk, its chairman said on Monday. 
    Nissan Motor Co Ltd expects to outpace overall growth in the U.S.
automobile market, which it sees rising by 1 percent at most in 2014, as the
Japanese automaker meets pent-up demand for the Sentra, Nissan's chief planning
officer said. 
    Troubled Italian airline Alitalia will ask banks for additional funding and
could be forced to launch another share issue if the business does not perform
as planned, its chief executive said.

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