European stocks edged lower on Tuesday, as traders took pause after a rally on signs a second coronavirus vaccine works effectively.
Up 1.2% on Monday after biotech Moderna said its vaccine was 94.5% effective, the Stoxx Europe 600 SXXP, -0.23% edged 0.2% lower, and the German DAX DAX, -0.03%, French CAC 40 PX1, +0.21% and U.K. FTSE 100 UKX, -0.87% also saw small declines.
A day after the S&P 500 SPX, -0.47% notched a record close, futures ES00, -0.20% on the U.S. index also weakened.
While the Moderna vaccine news was a welcome development — particularly, as top infectious diseases expert Dr. Anthony Fauci said, because no one who received it got a severe case — the current news is still worrisome. Hospitalizations in the U.S. reached a fresh record on Monday, according to the COVID tracking project, while California and New Jersey were among the localities tightening rules.
After markets closed, Federal Reserve Vice Chair Richard Clarida said further monetary and fiscal support for the economy would likely be needed, which were similar to remarks Chair Jerome Powell made last week. “We believe these comments are consistent with our expectation of the Fed eventually lengthening the maturity composition of its asset purchases, most likely at the December FOMC [Federal Open Market Committee] meeting,” said Lewis Alexander, U.S. Chief Economist at Nomura.
Banco Sabadell SAB, +6.75% rose 3% — extending Monday’s 25% surge — after confirming talks to be purchased by BBVA, just hours after the larger Spanish bank reached a deal to sell its U.S. operations to PNC Financial Services. BBVA BBVA, -4.40% shares slipped 5% after jumping 15% on Monday.
Analysts at Jefferies said buying Sabadell would give BBVA a broader footprint with small-to-medium sized enterprises and strong market share across Spanish regions.
Intermediate Capital Group ICP, +7.85% shares rose 7%, as the U.K. fund manager reported a 29% rise in its fiscal first-half pretax profit and said it has accelerated its fundraising timetable.