Stocks Fade After Dow Hits 22000 -- Update

By Justin Yang, Kenan Machado and Demi Guo Features Dow Jones Newswires

Dow poised to edge back from a record

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-- European earnings mixed

-- Pound firm ahead of Bank of England rate decision

Stocks around the world struggled Thursday, a day after the Dow Jones Industrial Average climbed above the 22000 mark for the first time.

London's FTSE 100 index fell 0.2% and the Stoxx Europe 600 edged down 0.1% in morning trading ahead of the Bank of England's interest rate decision later in the day. Markets across Asia declined, led lower by South Korea as index giant Samsung Electronics fell and investors anticipated higher taxes, while S&P 500 futures were down 0.2% and Dow futures were off 0.1%.

The Dow topped 22000 on Wednesday for the first time in its 32nd record of the year as stocks benefited from a buoyant global economy, a weaker dollar and a solid earnings season.

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European stocks have meanwhile struggled in recent sessions amid a climbing euro and mixed corporate results. German conglomerate Siemens AG fell 3.1% Thursday after its second results were slightly weaker than analysts expected. Italy's UniCredit SpA was one of the biggest gainers, up 4.2% after it reported a higher second-quarter profit.

Many investors Thursday were looking ahead to a Bank of England meeting later in the day.

The pound was last up 0.2% at $1.3259 after an upbeat reading on the U.K. services sector, close to its highest since September, although much of that has come from a weaker dollar and the pound has also fallen significantly against the euro in recent weeks. The WSJ Dollar Index, which measures the dollar against a basket of currencies, was up 0.1% on Thursday.

Economists polled by The Wall Street Journal expect the BOE to keep the benchmark interest rate on hold when it announces its decision at midday.

Almost exactly one year ago, the British central bank slashed rates to a record low of 0.25%.

In recent weeks, there have been increasing calls from monetary policy committee members to raise rates. But with inflation easing in June and continued modest growth, a majority of members are still expected to oppose an increase.

"I don't expect anything surprising from the BOE or any of these central banks, people are still concerned about the fact that there's no inflation. You're not getting any wage growth," said Ian Winer, head of equities trading at Wedbush Securities.

In Asia, South Korean stocks led the way lower, with the Kospi down 1.7% after recently topping highs set in 2011. A big pressure point was Samsung Electronics, which fell 2.5%--erasing its gains for the week--as the Samsung conglomerate's de facto head testified for the first time at his corruption trial.

For the market at large in Korea, the prospect of higher corporate and personal income taxes under the country's new leadership is also weighing on sentiment, said Andrew Bresler, deputy head of sales trading for Asia-Pacific at Saxo Capital.

South Korea's government is planning to raise taxes on wealthy individuals and large companies, the first increase in the country's corporate-tax rate since 1991.

A decline in technology shares also weighed down Asian bourses after they climbed Wednesday following Apple's strong quarterly report.

Japan's Nikkei and Hong Kong's Hang Seng fell around 0.3%, while Taiwan's Taiex declined 0.5% after hitting 27-year highs a day earlier.

Write to Kenan Machado at kenan.machado@wsj.com

(END) Dow Jones Newswires

August 03, 2017 05:43 ET (09:43 GMT)