Stocks Fade After Dow Hits 22000

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

Bank of England expected to keep rates on hold

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-- Stocks lower after Dow hits 22000

-- South Korea leads Asian markets lower

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

The FTSE 100 fell 0.2% and the Europe Stoxx 600 edged down 0.1% shortly after markets opened ahead of the Bank of England's interest rate decision later in the day. Markets across Asia declined, led lower by South Korea, while futures pointed to small opening declines on Wall Street.

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

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

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.

The pound strengthened against the dollar, up less than 0.1% to $1.3231, close to its highest since September, although the pound has also fallen significantly against the euro. The WSJ Index, which measures the dollar against a basket of currencies, was up less than 0.1% on Thursday.

In Asia, South Korean stocks led the way lower Thursday, with the Kospi down 1.7% after recently topping highs set in 2011.

A big pressure point was index giant 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.

The stock slide also fueled morning declines in the country's well-performing currency. The dollar was recently up 0.3% versus the won amid potential trade tensions between the U.S. and South Korea, said Heng Koon How, head of markets strategy at UOB Group.

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 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 04:04 ET (08:04 GMT)