Global stock market rally runs out of steam

AP News
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Posted: Feb 16, 2017 7:01 AM
Global stock market rally runs out of steam

SEOUL, South Korea (AP) — Global stocks turned lower on Thursday as investors became cautious after a days-long run pushed U.S. indexes to record highs.

KEEPING SCORE: Britain's FTSE 100 was down 0.5 percent at 7,268 while France's CAC 40 fell 0.4 percent to 4,903. Germany's DAX slipped 0.2 percent to 11,765. Futures augured a tepid start on Wall Street. Dow and S&P futures were down 0.2 percent.

US ECONOMY: On Wednesday, reports of stronger retail sales and inflation showed that the U.S. economy was stronger than expected. Consumer prices rose 2.5 percent in January from a year earlier, the highest rate since March 2012. The data give the Federal Reserve more encouragement to raise interest rates, and economists said the possibility is increasing that it may happen at the central bank's next meeting in March. While higher rates can weigh on growth, the confidence pushed U.S. stock indexes to new highs.

CORPORATE EARNINGS: Shares in consumer goods companies were under pressure after food and drinks giant Nestle said its earnings were weighed down last year by weak prices. Nestle shares were down over 2 percent in Switzerland after it missed its growth target and said it would have to step up its cost cutting program.

SAMSUNG: Samsung Electronics Vice Chairman Lee Jae-yong attended a court hearing in a bid to avoid his arrest for a second time. South Korean prosecutors investigating a massive corruption scandal that led to the impeachment of President Park Geun-hye suspect that the Samsung heir bribed the president and her friend to win government favors, an allegation that Samsung denies. Investors weren't immediately concerned by the possible arrest. Shares of Samsung Electronics rose 0.8 percent to 1,901,000 won in Seoul.

ASIA'S DAY: Asian markets closed mixed. Japan's Nikkei 225 fell 0.5 percent to 19,347.53 while South Korea's Kospi edged down 0.1 percent to 2,081.84. Hong Kong's Hang Seng index gained 0.5 percent to 24,107.70 and Shanghai Composite Index rose 0.5 percent to 3,229.62. Australia's S&P/ASX 200 inched up 0.1 percent to 5,816.30. Stocks in Taiwan and Indonesia were lower but in Singapore and the Philippines they were higher.

CURRENCIES: The dollar fell to 113.61 yen from 114.02 while the euro strengthened to $1.0635 from $1.0615.

OIL: Benchmark U.S. crude gained 27 cents to $53.38 per barrel. The contract finished 9 cents lower on Wednesday. Brent crude, the international standard, was up 37 cents at $56.12 a barrel in London.