Stock Rally Stalls Amid Mixed Earnings, BOE Decision
Dow industrials stall near record high
-- Pound drops after Bank of England leaves rates unchanged
-- European earnings mixed
Earnings results from dozens of big U.S. corporations pulled major stock indexes in different directions Thursday.
Some of the biggest insurance companies dragged the broader financial sector lower after reporting quarterly earnings. Meanwhile solid profits from consumer goods companies including Clorox pulled the consumer staples sector higher.
The result: Major U.S. stock indexes struggled to find direction the day after the Dow Jones Industrial Average rose above 22000 for the first time. The milestone marked its 32nd record of the year, as stocks benefited from a buoyant global economy, a weaker dollar and a solid earnings season.
The blue-chip index rose 21 points, or 0.1%, to 22037 in recent trading. The S&P 500 and Nasdaq Composite both declined 0.2%.
"The market isn't cheap, but it's not expensive either, given the low interest rate environment," said Nadia Lovell, U.S. equity strategist at J.P. Morgan Private Bank.
Prudential Financial shares fell 3.9% in recent trading as its operating income missed analyst expectations. MetLife shares were recently down 2.8%.
Kellogg's stock jumped 4.8% in recent trading as second-quarter earnings for the maker of Frosted Flakes and Eggo waffles beat analyst expectations. Separately, Clorox shares added 2.1% after the maker of consumer products such as liquid bleach and trash bags reported a climb in net profits for the latest quarter.
In other corporate news, shares of Tesla Inc. jumped around 6.8% after the electric-car company reiterated its plans to sell more vehicles during the second half of the year.
In Europe, the British pound came under pressure after the Bank of England kept interest rates unchanged, despite signaling that the long era of easy money is gradually drawing to a close.
The British pound fell 0.7% to $1.3130. The pound started falling in European afternoon trading when investors saw that only two BOE officials had dissented in favor of a rate increase, said Thu Lan Nguyen, analyst at Commerzbank AG. "Some anticipated there would be three dissenting," she said.
The central bank also lowered its 2017 U.K. economic growth forecast to 1.7% from 1.9% in May. The 2018 forecast was reduced to 1.6% from 1.7%.
Declines in the pound helped push the export-heavy FTSE 100 index up 0.9%, led by exporters such as Shire PLC, British American Tobacco PLC and AstraZeneca PLC.
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.
Riva Gold contributed to this article.
Write to Riva Gold at firstname.lastname@example.org
(END) Dow Jones Newswires
August 03, 2017 15:20 ET (19:20 GMT)