Categories: business

European stocks, Dow futures rise on stimulus hopes, while Bayer skids on profit warning

Europe Markets

German chemicals giant Bayer’s logo is pictured at the Bayer headquarters in Leverkusen.


roberto pfeil/Agence France-Presse/Getty Images

European stocks rose Thursday on the first day of the final quarter, helped by hopes U.S. lawmakers will reach a deal to provide new stimulus.

The Stoxx Europe 600
SXXP,
+0.31%

climbed 0.8%, and the major regional indexes also rose, with the German DAX
DAX,
-0.03%
,
French CAC 40
PX1,
+0.48%

and U.K. FTSE 100
UKX,
+0.63%

advancing.

Futures on the Dow Jones Industrial Average
YM00,
+0.71%

rose 271 points.

The Stoxx Europe 600 rose 0.2% in the third quarter, underperforming the 8.5% advance for the S&P 500
SPX,
+0.82%

over the same time frame, as the euro
EURUSD,
+0.06%

advanced 4.3% against the dollar.

The backdrop of elevated coronavirus cases continues in Europe. New rules in Spain mean that a majority of the country’s regions will limit public service and retail to 50% capacity, while France may introduce new restrictions Thursday night. Per person, Spain, France and the Netherlands have the highest rate of new cases over the last seven days of the world’s largest countries, according to data tabulated by Deutsche Bank.

One key question in the short-term is whether the U.S. will pass an additional stimulus bill. Analysts at Goldman Sachs called that prospect “unlikely” and said that if House Democrats take a vote on their $2.2 trillion package, then that would signal the end of negotiations with the White House. “If a vote occurs on that bill, the odds of pre-election stimulus would approach zero, we believe. A delay in the vote would be a positive signal, though there remain several obstacles to an agreement that would still need to be overcome,” said the Goldman Sachs analysts.

H&M
HM.B,
+6.91%

shares rose 6% as the Swedish fashion chain declared the worst was over from the pandemic. Its third-quarter earnings beat expectations, as it said sales in September fell 5% and that it plans to close 250 stores next year.

STMicroelectronics
STM,
+5.71%

rose 4% in Milan, as the chipmaker raises its 2020 revenue outlook after stronger-than-forecast third-quarter revenue of $2.67 billion. The company reported a “sharp” acceleration in demand for automotive product and microcontrollers chips.

Bayer
BAYN,
-10.22%

shares slumped 12% as the German pharmaceutical and chemicals company said next year’s core earnings per share will be slightly below this year’s at constant exchange rates, with sales flat.

Bayer said the agricultural sector is being hurt by low commodity prices for major crops, intense competition in soy, and reduced biofuel consumption, and moves in the Brazilian real are further hurting the company. It’s going to take impairment charges up to “high-single-digit” billion euros in its agricultural business.

Rolls-Royce
RR,
-10.80%

shares fell 3% as the struggling U.K. aircraft engine maker said it would sell £2 billion in shares priced at a 41% discount to Wednesday’s close and raise at least £1 billion more in the bond market.

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