European stocks edged lower Tuesday, losing momentum after the pause of a key coronavirus trial as traders waited for earnings from some of the world’s leading banks.
Up 0.7% on Monday, the Stoxx Europe 600 weakened by 0.5%.
The German DAX, French CAC 40 and U.K. FTSE 100 also sagged in early action.
U.S. stocks blasted higher Monday on little news during a light Columbus Day holiday, with the tech-heavy Nasdaq Composite rallying 2.6% to its third-highest close in history. But futures were lower as Johnson & Johnson on Monday night paused its trial of a coronavirus vaccine after an unexplained illness. It’s not uncommon for drugmakers to pause trials in this way, and so far the pause is not the more serious clinical hold.
Third-quarter earnings season starts Tuesday with results from JPMorgan Chase and Citigroup, as well as Johnson & Johnson.
Thursday, meanwhile, is the U.K.’s self-imposed date to reach a trade agreement with the European Union. The current arrangement lasts until the end of the year. Data from the U.K. showed the unemployment rate rose to 4.5% in the three months ending August, which was higher than expected but masks what is expected to be a bigger jump once the furlough program expires at the end of October.
Of stocks on the move, MorphoSys shares slumped 9% as the dual-listed biopharmaceutical said it’s selling a €325 million convertible bond.
Rolls-Royce shares dropped 8%, the second day of sharp losses for the troubled engine maker after nearly doubling in value last week.
A Rolls-Royce customer, Airbus, dropped 3% after a downgrade to underweight from hold at JPMorgan Cazenove. The broker cited a more cautious view on air travel and airline profitability, which led it to reduce its view on deliveries next year by 10%.
SSE shares rose 5% after agreeing to sell its 50% share in two energy-from-waste ventures for £995 million to an infrastructure fund managed by First Sentier Investors.