Global stock market rally runs out of steam
SEOUL, Korea, Republic Of — 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 per cent at 7,268 while France’s CAC 40 fell 0.4 per cent to 4,903. Germany’s DAX slipped 0.2 per cent to 11,765. Futures augured a tepid start on Wall Street. Dow and S&P futures were down 0.2 per cent.
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 per cent 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 per cent in Switzerland after it missed its growth target and said it would have to step up its cost cutting program.