European Stocks Track U.S. Losses

European Stocks Track U.S. Losses

European Stocks Track U.S. Losses

The FINANCIAL -- European stocks fell Wednesday, tracking losses in the U.S. where corporate earnings in the previous session widely missed expectations, especially in the technology sector.

In early trade, the Stoxx Europe 600 was 0.5% lower, deepening a 1% loss suffered in the previous session. U.S. stocks fell Tuesday on the back of weak earnings reports from International Business Machines Corp. and United Technologies Corp, according to Nasdaq.

After the U.S. market close, Apple Inc. reported earnings that showed sales of its iPhone had missed some analysts' estimates. In after-hours trading, Apple's shares fell 7%, erasing about $60 billion in market value. Asian shares ended Wednesday lower too.

One of the biggest decliners on the pan-European index Wednesday morning was ARM Holdings PLC. Shares in the computer- chip designer fell more than 3% in early trade after the group reported a smaller than expected rise in quarterly revenue.

After the results, Citigroup analysts Amit Harchandani wrote in a note to clients that concerns around smartphone sales would likely present a hurdle in the second half of the year.

European budget airline easyJet PLC was the biggest riser early Wednesday, with its shares climbing almost 4%. The group reported a 1% drop in third quarter sales but also said full-year profit would rise by up to 14%.

In currency markets, the euro extended it gains against the U.S. dollar and was recently 0.2% higher at $1.096.

BNP Paribas strategists said that some investors were selling the dollar to take advantage of a rally in recent weeks.

Considering the likelihood of a U.S. interest rate rise, though, they said they still expect the dollar to climb against the euro in the long term.

Brent crude fell 1% in early trade to $56.48 a barrel. Gold was down just as much, at $1,092 per troy ounce.

Gold recorded a ninth consecutive day of trading losses Tuesday amid expectations of higher interest rates in the U.S.