European stocks were on the rise as investors weighed earnings reports on Tuesday morning. The pan-European Stoxx 600 index saw a slight increase of 0.08% in London, with most sectors showing gains. However, London’s FTSE 100 fell by 0.68% due to a sales decline from drinks giant Diageo.
In other news, CrowdStrike shares took a hit after Delta announced plans to seek damages following an outage that cost the airline an estimated $350 million to $500 million. The outage was caused by a software update from CrowdStrike that disrupted Microsoft systems.
Meanwhile, U.S. homebuilding stocks are gaining momentum as consumer housing demand increases, leading to long buying momentum and stock price growth. Short positions in homebuilding stocks have lost nearly $1 billion on a year-to-date basis, prompting a reversal in short selling activity.
Tech stocks may soon find support, according to UBS, as recent market volatility has led investors to dump tech stocks for other interest rate sensitive assets. The recent pullback could present an attractive entry point for the sector, especially for companies with strong earnings growth visibility.
Overall, companies that miss earnings expectations are being punished more than usual this earnings season, with an average 3.8% decline in stock prices for those that disappoint. On the other hand, companies that beat expectations are seeing less of a reward than usual, with only a 0.3% rise in stock prices.
