European shares drop early; M&A failure hits CelesioComment on this story
Paris - European stocks dropped in early trade on Tuesday, tracking sharp losses on Wall Street following a number of disappointing earnings and outlook statements that raised concern about profit growth.
Shares in German drugs distributor Celesio tumbled 7.7 percent after suitor McKesson failed to get enough shares for its takeover bid to succeed.
At 10:04 SA time, the FTSEurofirst 300 index of top European shares was down 1.1 percent at 1,310.50 points.
Wall Street's S&P 500 slid 1.3 percent on Monday after a number of mid-sized companies posted weak earnings or forecasts.
According to Thomson Reuters data, almost 10 out of every 11 companies that have had pre-announcements for the current earnings season from S&P 500 companies have lowered estimates.
“We've been focusing a lot on macro data, but the real test is coming, with the earnings season starting, and the market might have been too optimistic about earnings recovery,” a Paris-based equity and exchange-traded funds (ETFs) trader said.
The focus will be on JPMorgan and Wells Fargo, set to post quarterly results before the opening bell on Wall Street on Tuesday. - Reuters