Weak Earnings Weigh on Global Stocks

• European stocks slip on weak earnings

• SAP,

Nordea Bank

among biggest losers in Europe

• Japanese stocks drop after exports tumbled for seventh successive month

Equities fell around the world Thursday as another snag in U.S.-China trade talks and weak earnings shook investor confidence.

The benchmark Stoxx Europe 600 index dropped 0.3%, with the technology and energy sectors leading the declines. Shares in SAP dropped 6% after the German business software maker reported disappointing second-quarter results. Nordea Bank also fell 6% after the Helsinki-based lender reported a 39% drop in profit.

In premarket trading, shares in Netflix fell more than 10% after the streaming giant said the number of subscribers in the U.S. declined for the first time in nearly a decade.

The U.K.’s FTSE 100 index continued to trade down 0.5% after the government spending watchdog warned of a recession lasting at least a year if Britain quits the European Union without a deal. The report said that a no-deal Brexit could cause the U.K. economy to shrink 2.1%.

A display showing the Tokyo stock index.


kimimasa mayama/Shutterstock

In Asia, the Shanghai Composite Index fell 1%. Progress toward a trade deal has stalled while the Trump administration determines how to address Beijing’s demands that it ease restrictions on Huawei Technologies, people familiar with the talks said. No face-to-face meetings have taken place or been scheduled since President Trump and President Xi Jinping of China met last month in Japan and agreed to resume talks.

Meanwhile, the Nikkei 225 gauge dropped nearly 2% after Japan’s exports tumbled for the seventh straight month in June, hit by a sharp drop in shipments of chip-making tools and automobile parts to China.

Futures tied to the Dow Jones Industrial Average slipped 0.2%. U.S. stocks fell Wednesday as the start of earnings season exposed weaknesses in the growth outlook for some companies.

Morgan Stanley

Procter & Gamble



are set to report second-quarter results later Thursday.

Investors will also be watching for the release of U.S. weekly jobless claims by the Department of Labor, which will give an indication of the health of the national economy.

Write to Lauren Almeida at lauren.almeida@wsj.com

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