European stocks sluggish as investors balance earnings beats with COVID-19 wave

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European stocks were sluggish Tuesday, as investors balanced generally stronger-than-expected third-quarter earnings results with worries about how rising coronavirus cases are leading to tougher restrictions on activity.

After a 1.8% tumble on Monday, the Stoxx Europe 600 SXXP, -0.11% eased 0.3%.

The French CAC 40 PX1, -0.54% lost 0.7%, while the German DAX DAX, -0.01% and U.K. FTSE 100 UKX, 0.06% saw minor changes.

Futures on the Dow Jones Industrial Average YM00, 0.15% rose 30 points after a rough 650-point downturn on Monday for the blue chips DJIA, -2.29%.

German Chancellor Angela Merkel told her Christian Democratic Union party colleagues the coronavirus situation is threatening, according to published reports, as Italians protested Monday night after strict measures introduced there, including 6 p.m. closures of bars and restaurants. In the Paris region, COVID-19 patients represent 67% of intensive care capacity.

“For the second time, Europe has turned into an epicenter of the Covid-19 pandemic. The partial curfews and other restrictions to contain the spread of the virus are casting a dark shadow over the near-term outlook,” said Holger Schmieding, chief economist at Berenberg Bank.

Third-quarter results have handily beaten analyst estimates on both sides of the Atlantic. Companies in the Stoxx 600 are expected to report a 28% drop in third-quarter earnings per share, compared to the 34% downturn expected at the end of June.

HSBC Holdings HSBA, 6.67% rallied 5% as the U.K.-headquartered, China-focused bank topped analyst estimates with a third-quarter profit of $2 billion as it said it will decide next year on making a “conservative” dividend payment. Banco Santander SAN, 4.31% gained 3% as the Spanish bank also topped estimates.

BP BP, 2.38% rose 1% as the oil giant’s adjusted profit topped estimates, though revenue was shy of expectations.

Capgemini CAP, 6.92% climbed 6% as the IT consultant, pressured Monday after SAP’s profit warning, reported stronger-than-forecast third-quarter revenue.

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