By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- Marks & Spencer Group PLC stood out
with gains on a mostly losing day for retailers after more downbeat
news over Christmas sales, while the Bank of England's Monetary
Policy Committee held tight on interest rates and quantitative
easing on Thursday.
The FTSE 100 index gave up earlier gains, moving to flat at
6,724.30, with support coming from a 0.8% gain for BP PLC (BP)
.
Pharmaceutical stocks also provided some inspiration, with
GlaxoSmithKline PLC (GSK) up 1.3% after a combination treatment for
a deadly skin cancer won accelerated approval from the U.S. Food
and Drug Administration.
Shares of AstraZeneca PLC (AZN) rose 1.2% after a diabetes pill
produced with Bristol-Myers Squibb Co. (BMY) won approval from the
FDA.
The Bank of England's Monetary Policy Committee left its
interest rates and quantitative easing policies on hold earlier.
Speculation had been rising that a fall in unemployment could
trigger a change in the bank's forward guidance, something that has
fueled gains for the British pound.
The European Central Bank also left policy unchanged, with a
presser due to get underway from its president Mario Draghi.
Retailers were commanding much attention on Thursday. Shares of
Wm. Morrison Supermarkets PLC sank 7.5% after the retailer became
the latest to report a challenging Christmas trading performance.
It said full-year underlying profit would be at the bottom of the
range of current market forecasts.
J. Sainsbury PLC shares dropped 2.4% and Next PLC, while Tesco
PLC dropped 0.6% after the company said comparable U.K. sales fell
by 2.4% in the six weeks to January.
Marks & Spencer Group PLC fared better with a nearly 4%
gain, the top riser for the FTSE 100. The retailer said it saw an
improved performance for general merchandise over the holidays,
with U.K. comparable sales down 0.2% in the third quarter, but up
1% in the Christmas trading period. Still, the quarterly
performance fell below expectations, said Marks & Spencer.
"Putting the disappointing numbers aside, the macro improvement
in the UK economy clearly isn't being reflected for the consumers
who remain cash-strapped as wage rises are not up with inflation,"
said Joe Rundle, head of trading at ETX Capital. "Shoppers in the
U.K. are now more sensible in the way they purchase their food
items -- either picking the higher end, [Waitrose for example and
even Sainsbury's to some degree] or the low-end [Aldi and Lidl --
both reporting strong Xmas trading numbers]."
"For M&S, Tesco and WM Morrison, it's the outlook for these
retailers which worries the market -- unlike Waitrose and
Sainsbury's, these three have questionable strategies which are now
under intense scrutiny by shareholders and the market alike,"
Rundle said in a note.
ARM Holdings PLC (ARMHY) was cut to hold from buy at Deutsche
Bank, which says it's waiting for better entry points for the chip
designer. Shares of the heavyweight sank 4.2%.
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