European companies listed in the US saw their shares climb on Thursday morning, with the S&P Europe Select ADR Index rising 0.85%. The gain was powered by a standout performance from UK advertising giant WPP, whose US-listed receipts jumped 26%. In contrast, vaccine maker BioNTech and browser company Opera both fell more than 2%.
An American depositary receipt (ADR) is a US-traded certificate that represents shares in a foreign company. It allows US investors to buy and sell overseas stocks on American exchanges, in dollars, without dealing with foreign currency or cross-border settlement. The S&P Europe Select ADR Index tracks a basket of these receipts, giving a snapshot of how European equities are performing during the US trading session.
What's behind the moves?
WPP's dramatic rise was the clear outlier. The company, one of the world's largest advertising and marketing services groups, has been under pressure in recent years as clients trimmed budgets and competition from tech platforms intensified. A 26% single-day jump suggests investors reacted to something significant, though the brief does not specify a catalyst. Such moves often follow earnings surprises, major contract wins, or strategic announcements.
Meanwhile, BioNTech's decline comes amid a broader trend: the company has been grappling with falling demand for its COVID-19 vaccine. As the pandemic recedes, sales have dropped sharply, and the firm has been working to pivot toward oncology and other areas. Its ADR slip on Thursday is consistent with the ongoing challenges it faces. For more on that, see our earlier coverage of BioNTech's reduced sales forecast.
Opera, the Norway-based web browser company, also fell more than 2%. The stock has been volatile in recent months, often moving on news about user growth and advertising revenue. The decline on Thursday may simply reflect profit-taking or sector-wide tech weakness.
Why ADR moves matter to everyday investors
For US investors, ADRs are a convenient way to diversify internationally without opening a foreign brokerage account. When you buy an ADR, you own a piece of a foreign company, but you trade it just like a US stock. That means you can react to overseas news during US market hours, and you receive dividends in dollars.
However, ADRs also come with unique risks. Currency fluctuations can affect your returns, and the underlying foreign market's trading hours may differ from the US session, leading to gaps in pricing. Additionally, ADR prices can be more volatile than the underlying shares, especially if the ADR is thinly traded.
The S&P Europe Select ADR Index is a useful barometer for European equities. When it rises, it suggests that US investors are feeling more optimistic about European companies. That optimism can stem from a variety of factors, including better-than-expected earnings, improving economic data, or shifts in central bank policy. Recently, European stocks have been hitting record highs, as noted in our piece on European stocks hitting record highs.
What to watch next
Investors will be watching to see whether WPP's surge is a one-off or the start of a sustained rally. If the move was driven by a specific event, such as a takeover approach or a major client win, the stock could continue to climb. If it was a short squeeze or a technical anomaly, the gains may fade quickly.
For BioNTech, the focus remains on its pipeline beyond COVID. The company has been investing heavily in cancer vaccines and other therapies, but those are still in development. Any news about clinical trial results or regulatory approvals could move the stock significantly.
Opera's trajectory depends on its ability to grow its user base and monetize through advertising and search. The company has been expanding in emerging markets, but competition from Google and other browsers is fierce.
Overall, the ADR index's gain on Thursday is a positive sign for European equities, but the divergence among individual stocks highlights the importance of looking beyond the headline number. As always, diversification and a long-term perspective are key. For more on how ADRs fit into a broader portfolio, you might find our analysis of Asian ADRs helpful.
In the coming days, investors will likely focus on any company-specific news from WPP, BioNTech, and Opera, as well as broader European economic data. The European Central Bank's policy stance and inflation figures will also be on the radar, as they influence the region's equity markets. For now, Thursday's session offered a reminder that even in a broadly rising market, individual stocks can move in very different directions.
