European stocks fell after oil prices advanced and the dollar was volatile against the major currencies following a weaker-than-expected U.S. jobs report released last Friday.
Oil prices pared earlier gains, which saw both the Brent Crude and West Texas Intermediate surge more than 5% after Russia and Saudi Arabia announced they had signed a joint agreement to establish a working group to help find ways to stabilize the market.
West Texas Intermediate was recently up 1.58% at $45.14 and Brent Crude was up 1.37% at $47.47 a barrel.
The pound advanced 0.17% against the dollar at $1.3316 while the euro fell 0.04% to $1.1152.
The pound was up after the U.K. services sector bounced back more than expected in August, with the purchasing managers' index becoming the latest indicator to point to a post-Brexit-vote recovery.
The IHS Markit/Chartered Institute of Procurement & Supply's services-sector PMI rose to 52.9 from 47.4 in July, pushing into the 50-plus expansion territory instead of rising to a neutral 50 reading, as analysts had expected.
In London, the FTSE 100 fell 0.22% to 6,879.42.
Miners and oil producers rose on the London benchmark.
Retailing group Marks & Spencer (MAKSY) fell in trading after it announced it would cut more than 500 head office jobs. The shares fell 1.14%. The retail chain, whose products range from clothing to food, saw same-store sales fall by 8.9% in its clothing and home arm. The company said today that it would cut 525 jobs in its head offices as part of a cost saving program. The cuts represent 15% of head office staff. The job cuts would result in a 1% annual reduction in domestic costs and a one-time charge of around £15 million ($20 million), the company said.
M&S is in a dispute with workers over changes to pay, cutting premium pay for Sundays, and the pension fund.
Lloyds (LYG) - Get Report and Royal Bank of Scotland (RBS) - Get Report fell after Deutsche Bank downgraded its outlook. Lloyds fell 2.1%, while RBS dropped 3.0%. David Locke, a banks analyst at Deutsche Bank, downgraded RBS to sell from hold and cut the price target to 170 pence from 200 pence, saying the bank is particularly vulnerable in the lower-for-longer interest rate environment.
Deutsche Bank also downgraded Lloyds to a hold from a buy. Lock said that while in the short term Lloyds could benefit from falling deposit costs and potential sub-debt redemptions, "we see risks from remortgage churn in the medium to long term."
In Frankfurt, the Dax fell 0.1% to 10,672.22 and the Cac 40 edged down 0.02% to 4,541.08 in Paris.
Housing association Vonovia (VONOY) was the biggest loser in the Dax, falling 2.2%, after announcing it would take over Austrian developer Conwert Immobilien Invest for about €1.7 billion, or at a premium of 23.8%.
The eurozone composite PMI came in 0.4 points below the initial 53.3 estimate for August after the services PMI fell short of the "flash" estimate. The composite index fell to 52.9 from 53.2 in July, while the services index dropped to 52.8, below the 53.1 originally announced and July's reading of 52.9.
In Madrid, the IBEX index rose 0.5% to 8,953.90.
Telefonica (TEF) - Get Report shares rose 2.6%. The Spanish group today announced plans to float its infrastructure business. The subsidiary that will be known as Telxius Telecom will be floated in the second half of 2016, with Telefonica maintaining a majority stake in the group. The division operates infrastructure assets including 15,000 telecom towers in Spain and submarine cables. Telxius also has 2,350 mobile masts in Germany.
The company also said it was considering an IPO or partial sale of its British unit 02, after a £10.5 billion takeover bid from CK Hutchison was shot down by the European Commission earlier this year.
U.S. markets are closed today for the Labor Day holiday but Dow Jones Industrial Average mini futures were recently up 1.0% and S&P 500 mini futures were down 0.5%.