By Josie Cox
European shares fell Tuesday, snapping a nine-session rally, as
investors turned away from Greece and toward the corporate-earnings
season.
The Stoxx Europe 600 ended the session down 1.0%. In the U.S.,
the S&P 500 was trading 0.4% lower at the European stock market
close on weak earnings reports from International Business Machines
Corp. and United Technologies Corp.
As of Monday's close, Europe's benchmark index had enjoyed its
longest winning streak since April 2014, largely fueled by Greece
reaching a bailout agreement with its international creditors.
Considering how much stocks have risen in recent days, it is
likely that many investors will now choose to sell and lock in a
profit, said Atul Shinh, an investment specialist on the multiasset
team at Investec Asset Management, which has around $120 billion in
assets under management.
Mr. Shinh said that the rebound in stock markets on Tuesday may
also have been accentuated by a lack of liquidity as a result of
some investors being out for the summer holiday.
"There was very little in terms of factors stimulating markets
in a big way today," said Simon Derrick, chief strategist at Bank
of New York Mellon Corp.
He said that stock market moves have been quite sharp recently,
so a reversal is not surprising. The Stoxx Europe 600 is still up
more than 5.5% since the start of July.
Some strategists said that in order for the recent stock-market
rally to continue, earnings reports have to meet or beat analyst
expectations this season.
One of the best performing companies on the Stoxx Europe 600
Tuesday was Akzo Nobel NV. Shares in the Dutch paint and chemicals
maker rose after the group reported that net profit jumped 61% in
the second quarter, as restructuring efforts continued to bear
fruit.
Tele2 AB was one of the worst performing-companies on the day.
Shares in the Swedish telecom operator slumped more than 6% after
it reported a second-quarter drop in net profit.
Oil and gas companies were the biggest gainers, as a result of a
slight recovery in commodity prices.
At Tuesday's close, September Brent crude, the global benchmark,
was trading 0.4% higher at $56.92 a barrel on the ICE Futures
exchange. On the New York Mercantile Exchange, light, sweet crude
futures for delivery in August was 0.5% higher at $50.70 per
barrel.
On Monday, U.S. oil prices dipped below $50 a barrel for the
first time since April on continued concerns that global crude-oil
supplies are overwhelming demand.
Gold prices also stabilized Tuesday after falling to their
lowest level in five years amid rising expectations that the U.S.
Federal Reserve will raise interest rates later this year. The
metal was little changed on the day at $1,106.30 per troy
ounce.
In currency markets, the euro was 0.9% higher against the U.S.
dollar at $1.087 in late trade.
European government bond prices were slightly lower.
The yield on 10-year German government bonds rose to 0.73%. The
yield on 10-year Spanish bonds was higher at 2.02% and the Italian
yield was up at 1.96%. Yields fall as bond prices rise.
Christopher Whittall contributed to this article.
Write to Josie Cox at josie.cox@wsj.com
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