Off the FTSE 100, shares in Carillion rival Interserve tumble
U.K. stocks fell Wednesday, with a slide in shares of fashion house Burberry Group PLC and publisher Pearson PLC leading the blue-chip market toward a potential loss for the third consecutive session.
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How markets are moving: The FTSE 100 index was down 0.2% to 7,744.63, with consumer services leading most sectors lower. But the utility, basic materials and financial groups were higher. On Tuesday, the London benchmark fell 0.2%, moving further away from the all-time closing high of 7,778.64 reached last week.
The pound traded at $1.3775, slipping from $1.3790 late Tuesday in New York.
What's driving markets: More corporate updates for the new earnings season are rolling in, and Burberry shares were big losers after the luxury-goods maker posted a decline in quarterly sales. The retail sector will come into further focus Friday with the release of U.K. retail sales for December, with analysts polled by FactSet currently expecting a month-over-decline of 0.6%.
Stocks in the U.K. and across Europe appeared to key off losses on Wall Street on Tuesday that came as investors returned following Monday's Martin Luther King Jr. holiday. The Dow Jones Industrial Average broke above the 26,000 level for the first time but closed lower.
The "U.S. markets inability to hold onto these sorts of gains might suggest that we could be due some sort of pullback, after the strong start to this year. Either that or investors are starting to get a little nervous ahead of a possible U.S. government shutdown at the weekend," said CMC Markets chief market analyst Michael Hewson in a note.
The collapse of British construction and support services heavyweight Carillion PLC (http://www.marketwatch.com/story/carillion-collapses-after-rescue-talks-with-creditors-uk-government-fail-2018-01-15)(CLLN.LN) this week continued to hanging over markets. Off the FTSE 100, Interserve PLC shares (IRV.LN) dropped as much as 10% following a Financial Times report (https://www.ft.com/content/1aa17614-fab7-11e7-a492-2c9be7f3120a) the Carillion rival is under U.K. government watch on financial fears.
Stock movers: Burberry (BRBY.LN) slumped 6.8% after the fashion house said third-quarter retail sales fell 2% (http://www.marketwatch.com/story/burberry-retail-sales-slip-backs-2018-guidance-2018-01-17). Comparable retail sales rose 2%, but in the U.K. fell by a high single-digit percentage, with the company citing tough comparables set by exceptional 40% growth a year earlier.
Pearson (PSON.LN) fell 6.4% after the publisher of educational materials sales for U.S. higher education course materials fell 3% on an underlying basis (http://www.marketwatch.com/story/pearson-upbeat-on-2017-results-no-change-to-tax-2018-01-17) in the first nine months of 2017, in line with the lower end of its guidance range. But Pearson also said it's full-year results will be at the upper end of its guidance.
Informa PLC (INF.LN) slid 7.7%, with the publisher and events company in continued talks about a purchase of UBM PLC (UBM.LN) . Informa and UBM set out the proposed terms of the deal on Wednesday. (http://www.marketwatch.com/story/ubm-informa-in-talks-for-53-bln-merger-2018-01-17)
Topping advancers, NMC Health PLC (NMC.LN) and Mediclinic International PLC (MDC.LN) rose 1.4% and 1.3%, respectively.
(END) Dow Jones Newswires
January 17, 2018 04:22 ET (09:22 GMT)