Global stock markets slip as European banks hit

Global stocks fell Tuesday after weak trade data added to growth worries, while an Italian windfall tax on lenders saw European bank shares plummet.

China's latest trade data showed the biggest fall in exports for more than three years, while the US trade deficit narrowed on a bigger pullback in imports than exports, according to government data released on Tuesday.

"The key takeaway from the (US) report is the lack of growth in exports and imports, which is indicative of weaker demand overall at home and abroad," said analyst Patrick O'Hare of Briefing.com.

Moody's meanwhile downgraded 10 regional banks and placed another six US lenders on watch for a possible downgrade, citing the rising costs of bank deposits and a worsening outlook for credit quality.

All three major US indices were in the red the entire day.

The Dow Jones Industrial Average finished at 35,314.49, down 0.5 percent, but more than 300 points above session lows.

"The initial selling was driven primarily by news of the Moody's downgrades," said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research

"But the major market indexes finished well above earlier lows as bargain hunters stepped in. Health care stocks led the markets all day."

European markets were hit following news of a windfall tax adopted by Italian Prime Minister Giorgia Meloni's ministers late Monday.

Milan's stock market closed 2.1 percent lower, while share prices of Italian banks Intesa Sanpaolo to Unicredit and Monte dei Paschi di Siena lost between five and 11 percent.

Fallout spread to French and German banks, with Credit Agricole down 2.5 percent at closing in Paris and Commerzbank losing 3.3 percent in Frankfurt.

The Italian government was "using part of the banks' billion-dollar profits to help families and businesses affected by rising interest rates," Deputy Prime Minister Matteo Salvini said on X, formerly known as Twitter.

Analysts at Banca Akros said the market was responding negatively to "this unexpected bad news," estimating that banks' earnings per share would fall by an average of seven percent.

New York - Dow: DOWN 0.5 percent at 35,314.49 (close)

New York - S&P 500: DOWN 0.4 percent at 4,499.38 (close)

New York - Nasdaq: DOWN 0.8 percent at 13,884.32 (close)

London - FTSE 100: DOWN 0.4 percent at 7,527.42 (close)

Frankfurt - DAX: DOWN 1.1 percent at 15,774.93 (close)

Paris - CAC 40: DOWN 0.7 percent at 7,269.47 (close)

EURO STOXX 50: DOWN 1.1 percent at 4,288.85 (close)

Tokyo - Nikkei 225: UP 0.4 percent at 32,377.29 (close)

Hong Kong - Hang Seng Index: DOWN 1.8 percent at 19,184.17 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,260.62 (close)

Euro/dollar: DOWN at $1.0957 from $1.1002 on Monday

Pound/dollar: DOWN at $1.2745 from $1.2784

Euro/pound: DOWN at 85.95 from 86.06 pence

West Texas Intermediate: UP 1.2 percent at $82.92 per barrel

Brent North Sea crude: UP 1.0 percent at $86.17 per barrel