European markets close higher as investors assess a deluge of earnings

U.S. stocks opened marginally higher on Wednesday.

The Dow Jones Industrial Average rose 48 points, or 0.14%, while the S&P 500 added 0.2%. The Nasdaq Composite inched up 0.19%.

— Samantha Subin

The pan-European Stoxx 600 index was up 0.4% by mid-afternoon, having recovered earlier losses of around 0.3%. Autos added 1.3% while utilities shed 0.9% as most sectors and major bourses ticked higher.

Marks & Spencer shares climbed more than 9% by early afternoon to lead the Stoxx 600 after the British retailer posted strong first-half earnings and restored its dividend.

At the bottom of the European blue chip index, Royal Unibrew shares slumped 11% after the Danish brewer narrowed its profit guidance and missed third-quarter estimates.

– Elliot Smith

The pan-European Stoxx 600 index was fractionally higher by noon London time, having recovered earlier losses of around 0.3%.

Utilities dropped 1.3% to lead losses while travel and leisure stocks added 1%.

Shares of Vestas rallied more than 9% in morning trade after the Danish wind turbine manufacturer beat adjusted operating profit expectations.

The company posted a third-quarter EBIT before special items of 70 million euros ($74.73 million), well above the 31 million euros projected in a company-compiled consensus.

Group President and CEO Henrik Andersen said Vestas’ positive increased through the third quarter as the company showed a “gradual improvement in our execution and profitability.”

The company also narrowed its full-year guidance on revenues and EBIT margin.

– Elliot Smith

Bayer on Wednesday revealed it is considering spinning off either its Consumer Health or Crop Science division, while ruling out a three-way split, as the German pharmaceutical and biotech giant looks for ways to address its beleaguered share price.

Confirming the group’s 2023 guidance alongside its third-quarter earnings report, CEO Bill Anderson said Wednesday that the company is “not happy with this year’s performance.”

“Nearly 50 billion euros in revenue but zero cash flow is simply not acceptable,” said Anderson, who took the reins in June. The company announced that it will “remove multiple layers of management and coordination,” which will include a “significant reduction in the workforce.”

“We are looking closely at our structural options. We have an expert team – including external financial advisors – evaluating them,” Anderson said.

“They’re reviewing market conditions, what structural changes would mean for our value creation, one-time costs and dis-synergies, cash flows and leverage ratios, tax leakage, and other criteria.”

– Elliot Smith

Marks & Spencer shares jumped more than 9% in early trade to lead the Stoxx 600 after the British retailer posted strong first-half earnings and restored its dividend.

At the bottom of the European blue chip index, Dutch lender ABN Amro fell 8% after beating third-quarter net profit expectations but missing analyst projections on net interest income.

– Elliot Smith

European stocks pulled back slightly at Wednesday’s market open.

The pan-European Stoxx 600 was down 0.3% in early trade, with insurance stocks shedding 0.9% to lead losses while retail stocks bucked the downward trend to add 0.8%.

Commerzbank on Wednesday posted a third-quarter net profit of 684 million euros ($730.4 million), more than triple the 195 million euros recorded for the same period last year.

The German lender’s results were buoyed by higher interest rates, with net income rising 34% to 2.2 billion euros.

The bank’s management also presented a strategy update, vowing to cut its cost-to-income ratio to 55% by 2027 and targeting a net profit of around 3.4 billion euros for that full year.

“The transformation efforts in recent years are increasingly paying off,” CFO Bettina Orlopp said in a statement.

“In the first nine months of the year, we have earned more than in the full year 2022.”

– Elliot Smith

Adidas on Wednesday announced that it reduced inventory levels by 23% year on year in the third quarter to 4.85 billion euros ($5.18 billion), a slightly larger decline than expected.

The German sportswear giant said its “conservative sell-in strategy” to wholesalers was paying off, as it also reported operating profit of 409 million euros for the quarter and a 1% rise in currency-neutral revenues.

Adidas CEO Bjørn Gulden said the third-quarter results were “better than expected” as momentum in the brand’s Terrace range drove new growth in its lifestyle business.

“We have scaled up supply but are far from covering the total current demand. The halo effect of these successful models, together with the new Originals campaign that we launched in September, has increased our brand heat in all parts of the world,” Gulden said.

“We see the interest in our brand and products increasing in all markets and are now experiencing a visibly higher interest from retailers for the sell-in for our Fall/Winter 2024 range.”

— Elliot Smith

The tech theme has been reigning supreme this year and one segment in particular stands out to Morgan Stanley: the memory sector.

Calling it “the gift that keeps on giving,” the investment bank notes that the sector’s “pricing power is now among the best in tech, and still in early recovery stage.”

The bank reveals its “top picks” and “preferred plays.”

CNBC Pro subscribers can read more here.

— Amala Balakrishner

From nutrition to beauty, a “global shift to wellness” is taking place — not just among consumers but also governments, Morgan Stanley says.

The Covid-19 pandemic was a big factor behind the rising focus on weight and its implications for health, the investment bank noted, though it added that wellness goes beyond weight loss and also encompasses fitness, nutrition, appearance, sleep and mindfulness.

CNBC Pro takes a look at the stocks Morgan Stanley says will be affected — both positively and negatively.

Subscribers can read more here.

— Weizhen Tan

European markets are expected to open in negative territory Wednesday.

The U.K.’s FTSE 100 index is expected to open 16 points lower at 7,393, Germany’s DAX down 42 points at 15,109, France’s CAC down 16 points at 6,970 and Italy’s FTSE MIB down 22 points at 28,245, according to data from IG. 

It’s another busy day of earnings ahead, with Commerzbank, Credit Agricole, Marks and Spencer, Telefonica and ABN Amro all reporting. On the data front, euro zone retail sales for September are due.

— Holly Ellyatt