European stocks retreat for second session over corporate earnings

European stocks retreated for a second day as investors fretted about corporate earnings against the backdrop of an expected US interest rate increase. Sweden's Ericsson tumbled, slumping to nine-year lows after issuing a profit warning.

In the US, investors adopted a cautious attitude as they waited for minutes from the Federal Reserve’s latest policy meeting to be released.

DUBLIN

The Iseq index closed down half a per cent on a mixed day. Building materials group CRH, the largest stock on the Dublin market, slid for the second consecutive day, ending up down 0.9 per cent to €29.37, while food group Kerry dropped 2.4 per cent to €68.79.

Ryanair, however, climbed for the second session in a row, advancing 1.9 per cent to €11.53, despite the headwind of ongoing pressure on sterling.

Real estate investment trusts Green Reit and Hibernia Reit both declined, with Green Reit down 0.7 per cent at €1.37 and Hibernia Reit down 1.2 per cent at €1.28.

Paper and packaging group Smurfit Kappa fell 1.9 per cent to €19.95, while there were gains for Fyffes, which added 2.1 per cent to €1.47, and Total Produce, which finished up 2.9 per cent at €1.71.

LONDON

The FTSE 100 slipped from the record highs reached in the previous session, with the decline partly reflecting the currency movements that weighed on some of its global companies. The mid-cap FTSE 250 index fell 0.7 per cent, but also remained near record highs reached this month.

The dollar dipped while sterling rebounded a touch from this month’s brutal sell-off.

That dollar weakness weighed on FTSE 100 companies which measure much of their revenues in dollar terms, such as pharmaceuticals group Shire and engineering group Rolls Royce, which both fell on Wednesday.

Mining companies rose, with Glencore, Anglo American and Rio Tinto all gaining between 0.9 per cent to over 6 per cent as the price of copper firmed on supportive inventory data.

British Airways-owner International Consolidated Airlines Group (IAG) rose following news that airline Monarch had secured a £165 million cash injection from its owner, Greybull Capital, allowing it to retain its licence to operate.

UK staffing firm PageGroup extended its gains from the previous session, up 3.3 per cent following a spate of target price upgrades. The company reported a set of better-than-expected results in the previous session.

EUROPE

The Stoxx 600 index fell 0.5 per cent, losing ground for the second straight session. So far this year the index is down 7.4 per cent, while stocks have also had a rocky start to October, a month in which they have advanced in five of the past six years.

Germany’s DAX fell 0.5 per cent, while in Paris, the Cac 40 dropped 0.4 per cent.

Swedish telecoms equipment maker Ericsson sank 20 per cent, the most in nine years, after reporting a slump in third-quarter sales and warning that its third-quarter profit would be “significantly lower” than expected after the downturn in its mobile broadband business accelerated. Finnish peer Nokia dropped 5.1 per cent.

Lufthansa was among the risers, gaining 4.3 per cent after an upgrade from analysts at Kepler Cheuvreux.

Italian lenders outperformed a flat bank sector, with UBI Banca, Banco Popolare and UniCredit up between 2.4 per cent and 6 per cent, after an upbeat note from analysts at Citi.

NEW YORK

Wall Street stocks fluctuated, following the steepest sell-off in four weeks, with investors remaining wary as they waited to see if the Federal Reserve’s policy meeting minutes would reveal a more hawkish tone.

The early leaders were insurers and dividend-paying defensive shares, including utilities, consumer staples and real estate.

Apple extended its longest winning streak in 20 months. Cisco Systems sank the most in three months, slumping with other network-equipment makers after Ericsson said its business was deteriorating faster than expected.

Energy producers also slipped as crude oil prices retreated.

Investors are on edge after metals company Alcoa dropped the most in seven years on Tuesday following results that missed analysts' estimates.

Railroad CSX will release earnings after Wednesday’s market close, while Delta Airlines, JPMorgan Chase and Citigroup are also among those scheduled to report this week.

– (Additional reporting: Bloomberg / Reuters.)