LONDON MARKETS: FTSE 100 Steers Lower As M&S, Pearson Fall

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Bank of England policy makers to speak Tuesday

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Blue-chip stocks in the U.K. struggled Tuesday, with Pearson PLC shares swinging sharply lower in the wake of a $1 billion stake-selling deal, while Marks & Spencer Group PLC shares dropped after the department-store operator issued a trading update.

The FTSE 100 index was down 0.7% at 7,317.26, and only the basic materials group was moving higher.

The index on Monday rose 0.3% (http://www.marketwatch.com/story/ftse-100-gain-held-in-check-as-miners-fall-2017-07-10), a second straight winning session.

Read:Will the Bank of England's 10-year hiatus on rate hikes end soon? What analysts say (http://www.marketwatch.com/story/will-the-bank-of-englands-10-year-hiatus-on-rate-hikes-end-soon-what-analysts-say-2017-07-05)

Media: Pearson PLC (PSON.LN) shares slid 6.2%, but they had been up roughly 3% in early trade after the education and publishing company said it's selling its 22% stake in Penguin Random House for $1 billion to German media company Bertelsmann SE, its joint-venture partner.

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Retail: Marks & Spencer (MKS.LN) shares fell 3.5% as the giant retailer said fiscal first-quarter 2018 like-for-like sales in the U.K. fell 0.5%. Food like-for-like sales were down 0.1%, while clothing and home sales on that basis declined 1.2%.

It also said U.K. group sales rose 2.6% year-over-year and that its full-year guidance is unchanged.

"M&S food sales continue to rise, driven by its store expansion program, and with around 200 new outlets to be opened by 2019, this should continue to add pounds and pennies to the bottom line. The continued fall in like-for-like sales at existing stores is a disappointment, however," said Laith Khalaf, senior analyst at Hargreaves Lansdown, in a note.

"Overall conditions for high street retailers remain pretty grim, with consumer purses under pressure and competition coming from all angles. M&S is swimming quite hard against this tide, so it deserves some credit for treading water," he said.

Shares of apparel and home furnishings retailer Next PLC (NXT.LN) were off 1.2% and DIY retailer Kingfisher PLC (KGF.LN) fell 0.6%.

Pound and policy makers: Meanwhile, sterling bought $1.2913, up from $1.2881 late Monday in New York.

The currency "may end up being the focus given that the main events are a panel appearance from Bank of England Chief Economist Andy Haldane and a speech from Deputy Gov. Ben Broadbent," said Connor Campbell, financial analyst at Spreadex, in a note.

"[Haldane] sparked a sterling surge in June after switching from dove to hawk, while the latter is yet to make his stance clear, meaning any rate hike titbits could be of great interest to the pound."

Haldane will be at a panel at 11:00 a.m. London time, or 6 a.m. Eastern Time, at the Bank of England in London. Broadbent will speak at the Scottish Council for Development and Industry in Aberdeen, Scotland, at 12 p.m. London time.

(END) Dow Jones Newswires

July 11, 2017 04:55 ET (08:55 GMT)