Europe stocks retreat after three-day rise as rising yields, oil dent sentiment
SPY•European shares closed 1% lower on Wednesday after three straight sessions of gains, as higher oil prices and rising bond yields weighed on sentiment. Pennon fell 20% after launching a £550 million rights issue and cutting its dividend.
1. Markets retreat
The pan-European STOXX 600 fell 1%, giving up most of its gains from the previous three sessions. Banks dropped 3.3%, while technology stocks eased from record highs.
2. Yields and oil rise
Bond yields in the United States and Europe edged higher. Germany’s 10-year government bond yield rose to 3.5279% before ending little changed, while Brent crude gained 0.5%. Investors were watching Federal Reserve meeting minutes and officials’ remarks for clues on interest rates.
3. Company moves
Pennon Group fell 20% after launching a fully underwritten £550 million rights issue and lowering its dividend to address operational problems. BE Semiconductor Industries declined 8.5% after UBS downgraded the Dutch chip-equipment maker to “sell,” citing risks to adoption of hybrid bonding. Third-quarter earnings for STOXX 600 companies are expected to rise 19.4% year over year, or 9.9% excluding energy, LSEG estimates show.
