* Sterling surges on British retail sales
* Wall Street edges lower as Intel, GE weigh after results
* European shares extend new-year rally
By Angela Moon
NEW YORK, Jan 17 Wall Street edged lower on
Friday, underperforming equity markets in Europe following a
slew of disappointing corporate earnings, while the dollar
extended gains to hit a seven-week high.
The S&P 500 was lower by afternoon session in New York as
declines in Intel and General Electric
outweighed the advance in American Express in the wake
of their quarterly earnings.
In Europe, however, shares rose in brisk volumes, extending
their new-year rally as expectations of a pick up in global
growth prompted investors to buy mining stocks.
The MSCI all-country world index, a measure of global equity
markets, was little changed, finishing down 0.1
A strong British retail sales figure shook the pound
out of a week-long torpor on Friday while the New
Zealand dollar was the biggest decliner among major
currencies, halting a run to nine-month highs.
On Wall Street, Intel and General Electric were among the
biggest decliners. Shares of Intel Corp lost 3.5 percent to
$25.61, weighing on all three major U.S. indexes after the
chipmaker's fourth-quarter earnings missed expectations by a
penny and the company gave a lukewarm forecast for revenue for
the current quarter.
General Electric lost 2.6 percent to $26.48. The
conglomerate posted a slightly better-than-expected rise in
quarterly revenue, propelled by its oil pumps and jet engines
businesses, but its full-year profit margins were disappointing.
But the Dow outperformed the broader S&P 500 index as
American Express shares climbed 4.9 percent to $92.06 after
reporting strong quarterly results late on Thursday.
"The market is frustrated at the moment, there is no reason
to push higher," said Ken Polcari, director of the NYSE floor
division at O'Neil Securities in New York.
"There are mixed earnings and even the ones that are coming
in stronger, people are taking advantage and using those as
sources of cash, so they are taking some money off the table,
which is just holding us here."
The dollar extended gains in afternoon session in New York,
hitting a seven-week high after a round of mixed U.S. data that
overall supported the view the world's largest economy was
steadily gaining steam, keeping the Federal Reserve on track to
continue to reduce its stimulus.
The euro fell 0.7 percent against the dollar to $1.3524
. The dollar index, a gauge of the dollar's value versus
six major currencies, rose 0.4 percent to 81.268.
Data showed U.S. industrial output rose at its fastest clip
in 3-1/2 years in the fourth quarter. Separately,
ground-breaking for new homes last month dropped 9.8 percent,
the largest percentage decline since April, though housing
starts were coming off a multi-year high in November.
"Overall, the U.S. economy is making steady, if uneven,
progress and that should keep intact expectations for sustained
Fed tapering this year," said Joe Manimbo, senior market analyst
at Western Union Business Solutions in Washington.
In Treasuries, the benchmark 10-year note was up
3/32, with the yield at 2.8323 percent.
In the currency market, the British pound was one of the
biggest movers of the day, rising 0.3 percent to $1.6411
following UK retail sales data that showed a 2.6 percent
increase in December.
Stocks also rose in the region as gains in consumer
cyclicals helped the broad FTSEurofirst 300 index gain
0.5 percent to close at 1,345.02 points, a level not seen in
The region's quarterly earnings season does not pick up
until next week. STOXX Europe 600 companies are seen
missing consensus by 0.4 percent on revenues and by 0.9 percent
on earnings, according to StarMine SmartEstimates, which focuses
on the predictions by the most accurate analysts.
The Dow Jones industrial average was up 47.93 points,
or 0.29 percent, at 16,464.94. The Standard & Poor's 500 Index
was down 3.52 points, or 0.19 percent, at 1,842.37. The
Nasdaq Composite Index was down 11.97 points, or 0.28
percent, at 4,206.72.
In commodities, Brent oil rose more than $1, driven by
demand for heating fuels and rising gasoline prices, but gains
were offset by expectations for increased supply from Libya and
Brent reversed earlier losses to trade near $107 a barrel by
mid-day. Brent oil for March delivery, which became the
front-month contract following the expiry of the February
contract on Thursday, rose $1.04 to $106.79 a barrel.