European shares slide on Fed outlook, worries of new virus cases

European shares moved further away from their three-month peak on Thursday after a downbeat economic outlook from the U.S. Federal Reserve and on worries of a second wave of COVID-19 cases.The pan-European STOXX 600 fell 2.6%, its fourth straight day of decline, with travel and leisure stocks, banks and automakers losing between 4.5% and 5%.

European shares moved further away from their three-month peak on Thursday after a downbeat economic outlook from the U.S. Federal Reserve and on worries of a second wave of COVID-19 cases.

The pan-European STOXX 600 fell 2.6%, its fourth straight day of decline, with travel and leisure stocks, banks and automakers losing between 4.5% and 5%. A possibility of a fresh rise in U.S. coronavirus cases dampened risk appetite, with a Reuters analysis showing infections rose slightly after five weeks of declines, partly due to more testing.

A strong rally in global stocks halted this week, with markets taking another leg lower on Thursday after the Fed warned of a long road to recovery while projecting the U.S. economy to shrink 6.5% in 2020 and the unemployment rate to be 9.3% at the year's end. Lufthansa slumped 12.5% after it admitted that positions of up to 26,000 employees are surplus to requirements, suggesting many more jobs will be cut at the German carrier.

Fiat Chrysler fell 5.3% and Peugeot maker PSA 6.5% after a report that the carmakers will face a lengthy EU antitrust probe over their planned $50 billion mergers.