NEW YORK: Wall Street stocks pulled back from records Tuesday following mixed earnings and economic data, while the British pound slid to two-year lows on renewed worries about a "hard" Brexit.
Earnings from large US banks topped analyst expectations, but highlighted the risk that the expected Federal Reserve interest rate cut could pinch profits.
US retail sales for June easily topped estimates, suggesting a confident consumer. But quarterly manufacturing data declined for the second straight time, meeting the technical definition of a "recession" for that sector.
Some analysts pointed to comments from President Donald Trump indicating the US and China are still far from a trade deal, while others focused on the effects of gravity following a string of recent records in share prices.
"The S&P 500 has reached into a level of overbought territory that suggests a period of consolidation and increased volatility may lie directly ahead," Canaccord Genuity equity strategist Tony Dwyer warned.
All three major US indices pulled back from Monday's records.
Earlier, European bourses pulled higher, with London advancing 0.6 percent as the pound sank on worries about a no-deal Brexit.
The pound slumped to $1.2397 against the US dollar, the lowest level since April 2017. Sterling's weakness comes as both candidates for Prime Minister have adopted a tough line on negotiations with Europe.
"The focus of the market is now squarely on politics and with Tories trying to outdo one another as to who will execute the 'hardest' Brexit (and) fear of a no deal have spiked materially," said Boris Schlossberg, managing director at BK Asset Management.
Among other markets, oil prices fell sharply following less confrontational US rhetoric towards Iran. Trump said the US would work to stop Iran for acquiring nuclear weapons, but is not pushing for "regime change" in the country.
In earnings news, JPMorgan Chase shook off early weakness and finished 1.1 percent higher after reporting record profits of $9.7 billion in the second quarter. The bank's consumer businesses were strong, but it signaled that it expects lower net interest income due once the Fed cuts rates.
That concern also weighed on Wells Fargo, which fell 3.0 percent, while Goldman Sachs jumped 1.9 percent after reporting better-than-expected profits.
Johnson & Johnson slid 1.6 percent after lifting its full-year revenue forecast, but not its outlook for profits.
- Key figures around 2040 GMT -
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New York - Dow: DOWN 0.1 percent at 27,335.63 (close)
New York - S&P 500: DOWN 0.3 percent at 3,004.04 (close)
New York - Nasdaq: DOWN 0.4 percent at 8,222.80 (close)
London - FTSE 100: UP 0.6 percent at 7,577.20 (close)
Frankfurt - DAX 30: UP 0.4 percent at 12,430.97 (close)
Paris - CAC 40: UP 0.7 percent at 5,614.38 (close)
EURO STOXX 50: UP 0.6 percent at 3,521.36 (close)
Tokyo - Nikkei 225: DOWN 0.7 percent at 21,535.25 (close)
Hong Kong - Hang Seng: UP 0.2 percent at 28,619.62 (close)
Shanghai - Composite: DOWN 0.2 percent at 2,937.62 (close)
Pound/dollar: DOWN at $1.2408 from $1.2518 at 2100 GMT
Euro/pound: UP at 90.32 pence from 89.95 pence
Euro/dollar: DOWN at $1.1211 from $1.1258
Dollar/yen: UP at 108.26 yen from 107.91 yen
Brent North Sea crude: DOWN 3.2% at $64.35 per barrel
West Texas Intermediate: DOWN 3.3% at $57.62 per barrel
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