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European stocks pause, earnings and global growth gloom weigh on investors

European stocks pause, earnings and global growth gloom weigh on investors

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European stocks stumbled on Wednesday amid growing investor unease over the extent of economic damage to come from the coronavirus pandemic, and as a difficult earnings season was getting under way.

Recent gains in Europe and the U.S. have been driven by optimism that Western governments are getting a handle on the deadly pandemic. But overshadowing that was a warning from the International Monetary Fund on Tuesday that this year would see worst global growth year since the Great Depression.

In Europe, shares of Adidas ADS, -1.67% fell nearly 3% after the German sportswear maker said it would receive a €3 billion ($3.3 billion) government-backed loan and suspend dividend payments. The company spoke of a “severe impact on its revenue and cash generation in most other parts of the world since mid-March,” in addition to difficulties in its China markets since end-January.

Energy companies were leading on the downside, as Brent BRNM20, 3.36% and U.S. crude oil CL.1, 1.16% prices fell by more than 2% and 2.5%, respectively. The International Energy Agency on Wednesday predicted a record fall in oil demand in April and rapidly filling crude storage as coronavirus shutdowns have crushed demand for the commodity.

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