European Markets Tumble On Weak Oil Prices And Trade Worries

BRUSSELS/FRANKFURT/PARIS (Alliance News) - The European markets ended Thursday's session sharply lower, extending the losses from the previous two days.

Falling crude oil prices and concerns over the trade tensions between the US and China following the arrest of the chief financial officer of Huawei Technologies weighed on the markets.

Huawei Chief Financial Officer Meng Wanzhou was arrested in Canada on suspicion of violating US trade sanctions against Iran and faces possible extradition to the US.

The development has added to uncertainty about whether the 90-day trade truce negotiated by President Donald Trump and Chinese President Xi Jinping will give the two sides enough time to reach a long-term deal.

The pan-European Stoxx Europe 600 index weakened 3.1%. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 3.3%, while the Stoxx Europe 50 index, which includes some major UK companies, lost 3.2%.

The DAX of Germany dropped 3.5% and the CAC of France fell 3.3%. The FTSE 100 of the UK declined 3.6% and the SMI of Switzerland finished lower by 3.1%.

In Frankfurt, Bayer lost 5.3% despite setting ambitious growth and margin targets through 2022.

In Paris, Capgemini sank 6.4% after its board decided to co-opt Laura Desmond as a new director.

Aerospace equipment maker Latecoere plunged 18% after cutting its 2019 earnings outlook.

Drug-maker Sanofi dropped 3.1% on reports that it plans to cut 670 jobs in France by end 2020.

In London, packaging company DS Smith tumbled 5.8% after it unveiled plans to sell its plastics division.

AstraZeneca dropped 1.6%. The drug major announced that it has completed an agreement with Switzerland -based Covis Pharma BV to sell its rights to the medicines Alvesco, Omnaris and Zetonna.

Dialight, a provider of sustainable LED lighting for industrial applications, sank 6.7% after warning the delays in raw material supplies adversely impacted November results.

Germany's manufacturing orders increased for a third straight month in October, defying expectations for a decline, led by strong foreign demand despite the global trade uncertainties.

Factory orders grew 0.3% from September, preliminary data from the Federal Statistical Office showed on Thursday, while economists' had forecast a 0.4% fall.

Private sector employment in the US increased by less than expected in the month of November, according to a report released by payroll processor ADP on Thursday. ADP said private sector employment climbed by 179,000 jobs in November after jumping by a downwardly revised 225,000 jobs in October.

Economists had expected an increase of about 195,000 jobs compared to the addition of 227,000 jobs originally reported for the previous month.

First-time claims for US unemployment benefits edged down by less than expected in the week ended on Saturday, the Labor Department revealed in a report released on Thursday. The report said initial jobless claims slipped to 231,000, a decrease of 4,000 from the previous week's revised level of 235,000.

Economists had expected jobless claims to dip to 225,000 from the 234,000 originally reported for the previous week.

Reflecting a modest increase in the value of imports and a slight decrease in the value of exports, a report released by the Commerce Department on Thursday showed the US trade deficit widened by more than expected in the month of October.

The Commerce Department said the trade deficit widened to USD55.5 billion in October from a revised USD54.6 billion in September. Economists had expected the trade deficit to widen to USD55.0 billion from the USD54.0 billion originally reported for the previous month.

Revised data released by the Labor Department on Thursday showed labor productivity in the US increased by slightly more than initially estimated in the third quarter. The report also said unit labor costs rebounded by less than previously estimated.

The Labor Department said productivity surged up by 2.3% in the third quarter compared to the previously reported 2.2% spike. The upward revision to the pace of productivity growth matched economist estimates.

Meanwhile, the report said unit labor costs climbed by 0.9% in third quarter compared to the 1.2% jump previously reported. Economists had expected the increase in unit labor costs to be downwardly revised to 1.1%.

Growth in US service sector activity unexpectedly accelerated in the month of November, according to a report released by the Institute for Supply Management on Thursday.

The ISM said its non-manufacturing index crept up to 60.7 in November after pulling back to 60.3 in October, with a reading above 50 indicating service sector growth. Economists had expected the index to dip to 59.2.

A report released by the Commerce Department on Thursday showed a steep drop in new orders for US manufactured goods in the month of October. The Commerce Department said factory orders tumbled by 2.1% in October after rising by a downwardly revised 0.2% in September.

Economists had expected factory orders to slump by 2.0% compared to the 0.7% increase originally reported for the previous month.