San Francisco Frontiers - Wall Street stocks rally loses steam

More US banks reported robust earnings Thursday, but US retail sales data disappointed.

"There is a good bit of news to digest this morning, including another batch of better-than-expected earnings results from the likes of Bank of America, Morgan Stanley, US Bancorp, and PNC Financial Services," said Briefing.com analyst Patrick O'Hare.

Shares in Morgan Stanley jumped 3.4 percent, but Bank of America and US Bancorp shares retreated.

US equities had rallied on Wednesday thanks to strong bank earnings and inflation data that provided a much-needed shot of relief to investors, reviving hopes of further cuts to interest rates.

"Wall Street's relief rally on Wednesday highlights how worried investors have become, particularly about rate cuts and inflation," said Bret Kenwell, US investment analyst at eToro trading platform.

But data released Thursday showed gains in US retail spending had slowed to 0.4 percent in December, missing market expectations of a 0.5 percent gain.

European and Asian indices gained after Wednesday's Wall Street rally.

The Paris stock market surged 2.1 percent on big gains for the luxury sector after Cartier owner Richemont reported record quarterly sales.

Shares in the Swiss luxury firm ended the day up more than 16 percent.

London rose more than one percent even as data showed the UK economy expanded at a slower pace than expected in November.

"It is a sea of green in the European equity space..." noted Kathleen Brooks, research director at XTB trading group.

"There are threats to inflation down the road, but they are concerns for another day.

"For now, stocks are playing catch up, bonds remain stable and the weakening in the dollar in recent days has helped to boost risk sentiment."

Still, there remains a certain amount of caution ahead of Donald Trump returning to the White House next week. The Republican has promised to ramp up tariffs on imports, and slash taxes and regulations, something that many fear could reignite inflation.

Oil prices fell amid uncertainty over a ceasefire deal between Israel and Hamas.

Gaza's civil defence agency said Thursday that Israel had pounded several areas of the Palestinian territory since the announcement of a ceasefire deal, killing at least 80 people and wounding hundreds.

Israel accused Hamas of backtracking on parts of the deal announced Wednesday.

Crude futures had won strong support since the announcement Friday of fresh US-UK sanctions on Russia's energy sector -- and amid fears Trump will ramp up measures against key producer Iran.

- Key figures around 1600 GMT -

New York - Dow: FLAT at 43,211.87 points

New York - S&P 500: UP less than 0.1 percent at 5,954.97

New York - Nasdaq Composite: DOWN 0.2 percent at 19,476.15

London - FTSE 100: UP 1.1 percent at 8,391.90 (close)

Paris - CAC 40: UP 2.1 percent at 7,634.74 (close)

Frankfurt - DAX: UP 0.4 percent at 20,655.39 (close)

Tokyo - Nikkei 225: UP 0.3 percent at 38,572.60 (close)

Hong Kong - Hang Seng Index: UP 1.2 percent at 19,522.89 (close)

Shanghai - Composite: UP 0.3 percent at 3,236.03 (close)

Euro/dollar: UP at $1.0301 from $1.0293 on Wednesday

Pound/dollar: DOWN at $1.2232 from $1.2239

Dollar/yen: DOWN at 155.27 yen from 156.52 yen

Euro/pound: UP at 84.21 pence from 84.08 pence

West Texas Intermediate: DOWN 1.8 percent at $77.27 per barrel

Brent North Sea Crude: DOWN 1.7 percent at $80.67 per barrel

burs-rl/sbk

G.Allen--SFF