European equity markets are set to end the week on a soft note Friday, although there has been little in the way of fundamental news to push shares in either direction. A downgrade of the utility sector by UBS and high bond yields in Spain have slightly tainted the picture, while the gains made in the markets through most of this week now offer some profit-taking opportunities, adding some pressure. U.S. markets look likely to follow the European ones at the open, with early pre-market trade showing the S&P 500 (INDEX: ^GSPC) set to open 0.3% lower.
Even in this weaker market, there are still a number of individual names underperforming. Here are three ADRs that the S&P should beat today.
Banco Bilbao Vizcaya Argentaria (NYSE: BBVA)
BBVA is leading the Spanish banks lower today amid a generally weak outlook for the country, after this week's bond auction showed a lack of demand for Spanish sovereign debt, leading the 10-year yield to top the 7% threshold once again.
This comes after the Bank of Spain reported this week that "bad loans" in the sector climbed to an 18-year high in May and accounted for almost 9% of total lending. Meanwhile the German government came out and said that the 100 billion pound bailout must be restricted to "viable lenders," emphasizing the importance of scrutiny to determine which banks may not actually survive. BBVA is down 3.6%.
Vodafone Group (NYSE: VOD)
Europe's largest mobile phone operator is down over 2.1% in London today after it reported first-quarter service revenue gaining just 0.6%, far below expectations. The company said this was due to customers in Spain and Italy cutting spending, while growth in India also slowed.
This comes as the company agrees to merge networks with rival firms in Europe as a means to limit the impact of the slowdown on the continent. Vodafone last week agreed one such arrangement with Ireland's Hutchison Whampoa, already having a similar plan in place with Telefonica's (NYSE: TEF) O2 unit in the U.K.
Veolia Environnement (NYSE: VE)
The utility major is seeing a bout of profit taking hitting its share price today, down 2.6%. This more than pares yesterday's gains made after Highstar Capital agreed to buy Veolia's U.S. waste management business for $1.9 billion. The company said this should allow it to cut its debt by $1.8 billion, and it noted that after the sale, it will have achieved 60% of its 5 billion pound divestment plan.
As usual, this morning's European trading saw some stocks lose ground -- and perhaps provide some European buying opportunities. Indeed, legendary investor Warren Buffett has recently spent more than $1 billion buying a European large-cap stock that's currently trading well below its 2012 high.
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