European stocks stumble on COVID-19 vaccine setback, while U.S. equity futures fall on stimulus worries – MarketWatch

A previous version of this article incorrectly identified the maker of a COVID-19 vaccine. The story has been corrected.

European stocks and U.S. equity futures fell on Friday, as investors anxiously watched progress over the stimulus package out of Washington, and the Brexit negotiations, and they absorbed mixed news on COVID-19 vaccines.

The Stoxx Europe 600 index
fell 0.8% to 389.89, with the index down 1% for the week. The German DAX
fell 1%, the French CAC 40
dropped 0.9%, and the FTSE 100
was down 0.5%.

The FTSE’s losses were softened by a 0.5% drop in the pound
against the dollar, after U.K. Prime Minister Boris Johnson said the country needs to brace for the likelihood that a post-Brexit trade deal with the European Union won’t happen. A weak pound can boost the competitiveness of goods and services from multinational companies listed in London.

“We need to be very, very clear there is now a strong possibility — a strong possibility — that we will have a solution that’s more like an Australian relationship with the EU than a Canadian relationship with the EU,” Johnson said, according to a video address released by his office. Sunday is the new deadline for talks to conclude on a trade agreement between the EU and the U.K.

Wall Street was also setting up for a weak session, with Dow futures
dropping 142 points. Discussions over a bipartisan $908 billion pandemic relief package in Washington continued to show signs of a struggle on Thursday. That is as economic data showed a sharp rise in jobless claims, likely due to an uncontrolled second wave of the COVID-19 pandemic in the U.S.

Stocks in Europe failed to get any lift from Thursday’s news that the European Central Bank expanded and extended its asset-buying program as the region struggles amid the COVID-19 pandemic. The moves were largely in line with expectations.

“Grim coronavirus numbers across Europe are also weighing on risk appetite this morning. The number of new COVID-19 infections has reached a record high in Germany, and stricter lockdowns appear likely now across Europe,” said Milan Cutkovic, market analyst at Axi, in a note to clients.

Vaccine news was front and center, with shares of Sanofi

down 2.3%, after the French drug company said the COVID-19 vaccine treatment it is developing with U.K. pharmaceutical giant GlaxoSmithKline

has been delayed due to insufficient immune response in the elderly. Shares of GlaxoSmithKline rose 0.7%.

“While governments and central banks are taking decisive action to combat the negative effects of the prolonged lockdowns, it is becoming more difficult for market participants to ignore the imminent effects of this crisis,” said Cutkovic.

There were vaccine setbacks elsewhere, with Australia abandoning a plan for a COVID-19 vaccine from biopharmaceutical company CSL
after false positive results to HIV tests.

On a more positive note, late on Thursday, a U.S. Food and Drug Administration advisory committee voted in favor of recommending emergency authorization for the COVID-19 vaccine candidate from drug company Pfizer
and its partner BioNTech
The FDA may make its decision as soon as Friday. The U.K. began to roll out its vaccine program this week.

Among most active stocks, shares of Ericsson
slid 7%, after the Swedish telecommunications-equipment vendor said it has filed a lawsuit against Samsung Electronics
in the U.S. over violations of contractual commitments. Ericsson warned that delayed royalty payments and legal costs could cost it between 1 billion and 1.5 billion Swedish kronor ($118.1 million-$177.2 million) a quarter.

Shares of Randstad
climbed near 6%, after the Dutch recruitment company reported a faster-than-expected recovery in the fourth quarter of the year so far, and lifted guidance.

Shares of Rolls-Royce
fell over 4%, after the British aircraft-engine maker said it now expects a bigger-than-expected cash outflow of £4.2 billion ($5.58 billion) for 2020, due to surging coronavirus infections that have slowed a recovery for air travel.

Koninklijke Ahold Delhaize
said it has secured a €1 billion ($1.21 billion) sustainability revolving credit facility, which will help the Amsterdam-listed food retailer cut wastage and carbon emissions and provide financial flexibility amid the pandemic. Shares fell 0.6%.