World stock markets fell Friday as a rash of disappointing company results triggered profit-taking ahead of the weekend, although the Dow managed to hold on for its third straight record close.
Wall Street recovered from early losses, but still felt the impact of downbeat results at the end of the week.
“It was a pretty good week, obviously ending on a sour note,” Chris Low of FTN Financial told AFP.
“We started the week with better than expected earnings form the big banks. At the end of the week, we had Amazon.”
The online retail behemoth fell 2.5 percent after the company reported a dip in profits despite a big boost in sales.
Meanwhile, the oil supermajors were split, with ExxonMobil falling 1.5 percent as second quarter profits surged but missed expectations as output fell, while Chevron rose 1.8 percent after it reported better-than-expected profit.
Investors also were digesting the better but below-expectation GDP growth of 2.6 percent in the second quarter, as well as the political uncertainty after another failed attempt at healthcare reform in the US.
“The result has thrown cold water on the hopes for a pro-growth agenda,” economist Diane Swonk said in a research note.
“In fact, policy uncertainty, which places a drag on growth, is measurably on the rise.”
The dollar took a hit from US GDP data which cast further doubt on any early interest rate increase from the Federal Reserve.
Oil got a lift from the weaker dollar, this week’s US stockpile data and lingering expectations of more production cuts, or at least more discipline in implementing the current ones.
Tobacco stocks plunged after the US Food and Drug Administration said it will look at ways for companies to cut nicotine levels in cigarettes to make them less addictive and reduce tobacco-related diseases and deaths.
This will “blow a hole in their earnings,” said Neil Wilson, senior market analyst at ETX Capital in London.
Shares in Altria, which markets brands such as Marlboro and Chesterfield, fell nearly 10 percent in New York, while in London British American Tobacco fell more than seven percent, and Imperial Brands dropped nearly five percent.
Mike van Dulken, at Accendo Markets, however, said that the reaction may have been overdone.
“It might not sound great, but it doesn’t read like the industry is destined to go up in smoke,” he said.
The mood also soured in Europe, where shares in Renault tumbled on a weak outlook for the French carmaker despite surging sales and record profits in the first half of 2017.
In Frankfurt, BMW, Daimler and Volkswagen shares also fell. The three were this week hit with lawsuits over their alleged collusion to drive up the prices of their cars.
London’s benchmark FTSE 100 index was down one percent at the closing bell, weighed down by poor results from troubled telecoms and television firm BT Group.
“The FTSE sell-off has intensified into the close, with the blue chip benchmark hitting its lowest level in over two weeks,” noted Josh Mahoney at IG.
BT shares slid after the group posted a 42 percent slump in first-quarter profits, rocked by fresh fallout from an Italian accounting scandal.
Barclays shares fell as the bank reported a first-half net loss of œ1.21 billion ($1.58 billion, 1.35 billion euros).
Key figures around 2100 GMT
New York – Dow: UP 0.15 percent at 21,830.31 (close)
New York – Nasdaq: DOWN 0.12 percent at 6,374.68 (close)
London – FTSE 100: DOWN 1.0 percent at 7,368.37 points (close)
Frankfurt – DAX 30: DOWN 0.4 percent at 12,126.70 (close)
Paris – CAC 40: DOWN 1.1 percent at 5,113.39 (close)
EURO STOXX 50: DOWN 0.7 percent at 3,467.73
Tokyo – Nikkei 225: DOWN 0.6 percent at 19,959.84 (close)
Hong Kong – Hang Seng: DOWN 0.6 percent at 26,979.39 (close)
Shanghai – Composite: UP 0.1 percent at 3,253.24 (close)
Euro/dollar: UP at $1.1755 from $1.1677 at 2100 GMT Thursday
Pound/dollar: UP at $1.3139 from $1.3066
Dollar/yen: DOWN at 110.71 yen from 111.28 yen
Oil – Brent North Sea: UP 55 cents at $52.07 per barrel
Oil – West Texas Intermediate: UP 67 cents at $49.71