By Dow Jones Business News, March 15, 2013, 07:20:00 AM EDT
By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) -- The U.K.'s top share index pulled back from a five-year high Friday as financial shares
came under pressure after the Federal Reserve said it found weaknesses in the capital plans of J.P. Morgan Chase & Co.
and Goldman Sachs Group Inc.
The FTSE 100 stock index fell 0.4% to 6,502.93 but remains on track for a 0.3% weekly gain. It's up more than 2%
since the beginning of March. The index closed at a five-year high Thursday.
U.S. stock-index futures, meanwhile, pointed to a lower start for Wall Street. The Dow Jones Industrial Average (DJI)
scored yet another record close Thursday while the S&P 500 (SPX) ended within a whisker of its all-time closing high.
"It seems incredible that [two weeks] ago analysts were loudly debating the sustainability of a 14,000 Dow. Two weeks
and over 500 points later, the macro backdrop is no better, but already the 15,000 level is creeping into view," said
Matt Basi, head of U.K. sales trading at CMC Markets.
"Never has the old adage that it doesn't pay to argue with the market rung so true -- index shorts will be starting to
get very painful indeed," he said.
Analysts at Credit Suisse on Friday said they were maintaining a 4% overweight recommendation on equities. But they
raised their year-end S&P 500 target to 1,550 to 1,640 and lifted their FTSE 100 target from 6,600 to 7,000.
In London, index heavyweight HSBC Holdings PLC ( HBC ) fell 1.4%
The Fed gave passing grades to J.P. Morgan Chase ( JPM ) and Goldman Sachs ( GS ) passing grades in stress tests, but
required them to resubmit their share distribution plans to the central bank by the end of the third quarter, citing "
weaknesses" in their capital plans.
Shares of Royal Dutch Shell (RDSA) (RDSB) dropped 1.8%. Analysts at J.P. Morgan downgraded the oil giant's shares to
underweight from neutral, citing concerns about growth, potential capital requirements, and the implications for near-
term cash returns.
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