European Stocks Fall, Wall Street Futures Slip As Spain Invokes Catalan Rule

Frankfurt (Oct 19)  European stocks fell across the board Thursday after Spain's central government said it will assume control of the region of Catalonia after its President appeared to defy Madrid's deadline on dropping its call for independence.

"The government will continue with the procedures set out in Article 155 of the Constitution to restore the legality of self-rule in Catalonia," the Spanish government said in a statement, adding that suspension procedures will begin Saturday.

The region-wide Stoxx 600 index was marked 0.57% lower by 10:30 London time, the steepest slide in nearly two months, while benchmarks in Germany (DAX -0.5%) and France (CAC-40 -0.4%) were trading deeply in the red following both the Spanish government's statement and some big earnings misses from the region's biggest companies.

Spain's benchmark IBEX 35 index fell 1%, extending losses on the session after the government's statement, which followed a letter from Catalan President Carles Puigdemont that failed to clarify his quasi-declaration of independence earlier this week and continued to threaten a parliamentary vote to separate if Prime Minister Mariano Rajoy refused to engage in talks.

U.S. equity futures, which fell sharply after the statement, pared some of those losses, with Dow Minis pointing to a 70 decline for the Dow Jones Industrial Average and the S&P 500 called 9 points lower at the opening bell.

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