May 3, 2018 / 7:36 AM / 9 months ago

European shares retreat as trade worries weigh on Wall Street

MILAN/LONDON (Reuters) - European bourses closed in negative territory on Thursday at the end of a session laden with corporate earnings and as worries over global trade tensions weighed on Wall Street.

FILE PHOTO: Traders prepare before the opening of the German stock exchange in front of the empty DAX board, at the stock exchange in Frankfurt, Germany, June 24, 2016. REUTERS/Staff/Remote/File Photo

The pan-European STOXX 600 index fell 0.75 percent, retracing from three-month highs while in New York, the S&P 500 .SPX, the Dow Jones Industrial Average .DJI and the Nasdaq NDX were down 1.2 percent, 1.4 percent and 1.3 percent respectively.

“Global stocks are on the slide in the wake of a weak U.S. open today, with trade fears and a strengthening dollar weighing on sentiment”, said Joshua Mahony, a market analyst at IG.

Treasury Secretary Steven Mnuchin has arrived in Beijing for talks on tariffs but with state media saying China will stand up to the U.S., a breakthrough is viewed as unlikely, especially as the delegation is expected to leave as early as Friday evening.

Outside of an overall negative market sentiment, a series of disappointing earning updates also dragged European stocks down.

Smith & Nephew (SN.L) slumped 7 percent after Europe’s biggest artificial hip and knee maker cut its forecast for full-year underlying revenue growth after some markets softened and it saw a slowdown in its bioactives business.

“Following on from weak results from competitors, results across most product lines were slightly soft... However, Bioactives was the major disappointment,” said UBS in a note.

Belgium’s Bpost (BPOST.BR) plunged 13 percent, leading fallers on the STOXX as it missed expectations and Norwegian media group Schibsted (SBSTA.OL) also declined 5.3 after its results disappointed.

Adidas (ADSGn.DE) fell as much as 6.8 percent after the German sportswear firm posted sales growth slightly shy of analyst expectations.

Results elsewhere showed the negative impact of strength in the euro during the first quarter.

German drug and crop chemical Bayer (BAYGn.DE) cut its full-year guidance as a stronger euro weighs on the value of overseas revenues. Its shares edged up 0.35 percent.

Adverse currency moves also led to a 2 percent revenue drop at healthcare group Fresenius (FREG.DE) and resulted in a lower-than-expected core profit for Belgian chemicals group Solvay (SOLB.BR).

Fresenius fell 1 percent and Solvay was down 5.7 percent.

Elsewhere, however, some well-received company updates provided support. Logitech (LOGN.S) rose 6.5 percent and French utility Veolia (VIE.PA) added 2.6 percent as its domestic water business returned to growth and international activities also showed double-digit growth.

Reporting by Danilo Masoni and Julien Ponthus; Editing by Matthew Mpoke Bigg

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