European Stocks Edge Down Ahead of Brexit Vote

By Anna Isaac 

U.S. stock futures and equities across Europe were mostly flat Tuesday as investors turned their attention to the health of major corporations reporting third-quarter earnings while awaiting further developments on Brexit.

Futures tied to the Dow Jones Industrial Average index wavered between tepid gains and losses ahead of another day laden with earnings reports. A range of household names are poised to report this morning, including Harley-Davidson, United Parcel Service and Procter & Gamble. In the afternoon, tariff-hit Whirlpool will report earnings, along with social media company Snap Inc.

Meanwhile, shares of Cadence Design Systems rose about 4.3% in off-hours trading after the engineering-services provider posted stronger-than-expected third-quarter results.

The pan-continental Stoxx Europe 600 index was also mostly flat as Brexit uncertainty weighed on investor appetite ahead of another day of voting by U.K. lawmakers on the terms of the nation's exit from the European Union.

The British pound fell 0.2% against the dollar. Analysts expect the pound to face further volatility in the days ahead.

Sovereign bond yields in major European economies fell amid the continuing political upheaval. Bond yields fall as prices rise. The German 10-year bund was down 2.7 basis points to minus 0.368%, while the yield on the U.K. 10-year gilt ticked down to 0.726%. The yield on the U.S. 10-year Treasury ticked lower to 1.780%, down from 1.794% on Monday.

Among European stocks, shares in Just Eat rose almost 25% in London after Prosus made a GBP4.9 billion ($6.3 billion) offer to buy the food-delivery company. The deal was swiftly rejected by Just Eat's board, as the terms are less attractive than it's proposed merger with Amsterdam-listed Takeaway.com.

Shares in Reckitt Benckiser Group PLC fell by nearly 5%, its biggest drop in more than six months after the consumer-goods company issued its second profit warning this year.

China's Shanghai Composite Index gained 0.5% after President Trump said Monday that a trade deal between the U.S. and China "is coming along very well," leading to speculation that the two nations may reach a tariff agreement in the coming months. His top trade negotiator also said that the U.S. aims to finish the first phase of talks by mid-November when the two countries meet in Chile.

Later Tuesday, markets will get an update on the health of the housing market in the U.S. when the National Association of Realtors publishes figures on existing-home sales for last month. Economists surveyed by The Wall Street Journal expect sales to have fallen by 0.2%.

Write to Anna Isaac at [e-mail]

(END) Dow Jones Newswires

October 22, 2019 06:39 ET (10:39 GMT)

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