European shares are in negative territory Friday, reversing the brief respite shown Thursday. Investor sentiment was hurt by disappointing earnings updates from tech giants Amazon and Google in the US, overnight. European company updates have also failed to offer much support.
By 1335 BST, the EUROSTOXX 600 was down 0.83%, while the EUROSOTXX 50 had lost 1.21%. The German DAX was 1.07% in the red, the French CAC was off 1.63% and the Spanish IBEX fell 0.93%.
US tech company earnings hurt
Earnings updates published overnight from US tech behemoths Amazon and Google, worked to encourage a gloomier tone in Europe, Friday.
Another record quarterly profit wasn’t enough to impress, after Amazon’s third quarter revenues came in a little below expectations, 29% higher than a year earlier, at $56.6 billion. Even growth of 46% in the AWS unit failed to bring much cheer, coming in, as it did, below the rates of growth reported in the cloud computing units of Microsoft and Google.
Google’s third quarter earnings report was equally unimpressive, despite some strong numbers. Revenue growth of 21% wasn’t strong enough to support gains in Google shares, after hours, Thursday.
In addition, the tech giant was the subject of an NYT article stating that it helped cover-up a sexual harassment complaint against Android creator, Andy Rubin.
European stock movers
Adding to the weaker tone Friday, was a more than 20% slump in Valeo’s stock price. The French auto parts maker reported its Q3 earnings Thursday, which disappointed and included a lower outlook amid still weak Chinese demand and other headwinds.
Valeo shares sank 20.02% to hit €23.89, continuing the downward trend the stock has experienced for much of 2018-to-date.
Electrolux shares were also in the red as the Swedish electrical appliance maker’s third quarter update included lower expectations for demand and sales.
SEB shares were also lower as the French household appliance maker reduced its sales forecast.