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U.S. stocks retreat as earnings offset European stimulus plan

U.S. stocks fell Friday, trimming the first weekly gain of 2015, as weaker-than-forecast results at companies from United Parcel Service Inc. to Kimberly-Clark Corp. offset confidence that central banks will support global growth.

UPS slumped 9.9 percent as it said preliminary 2014 earnings were lower than previously forecast, after an over-expanded program to handle a deluge of holiday shipments. Bank of New York Mellon Corp. and State Street Corp. led financial shares lower after both said the falling euro hurt revenue from the region. Kimberly-Clark dropped 6.1 percent after forecasting 2015 earnings that missed estimates.

The Standard & Poor’s 500 Index lost 0.6 percent to 2,051.82, paring a weekly gain to 1.6 percent. The Dow Jones Industrial Average dropped 141.38 points, or 0.8 percent, to 17,672.60. The Nasdaq Composite Index gained 0.2 percent. The Stoxx Europe 600 Index rallied 1.7 percent a day after the European Central Bank expanded its stimulus plan.

“The bigger picture is that we had a pretty sizable move in the market the day before,” Kevin Caron, who helps oversee $170 billion at Stifel Nicolaus & Co. in Florham Park, N.J., said in a phone interview. “The market is still assessing the recent actions by the ECB, trying to figure out how much of that action was already priced into markets going into the meeting and what it might mean for markets going forward.”

About 6.5 billion shares changed hands on U.S. exchanges Friday, in line with the three-month average. Selling accelerated in the final 30 minutes of trading as materials producers extended declines to 1.6 percent and investors anticipated the results of an election in Greece on Sunday. Opinion polls show the anti-austerity party may win enough votes to take power.

Equities had earlier pared declines after ECB Executive Board member Benoit Coeure told Bloomberg TV that policy makers are prepared to extend asset purchases beyond September 2016 if the inflation outlook warrants it. The ECB on Thursday unveiled a plan to buy 60 billion euros ($69 billion) a month in bonds through that time.

The S&P 500 gained 1.6 percent this week and briefly erased its losses for the year following two retreats that lasted five days amid tumbling oil prices and concerns that the global economy is slowing. The index is about 1.9 percent from its all- time high reached Dec. 29.

Stocks rose for a fourth day Thursday, extending the longest rally of the year, as the ECB expanded an asset- purchase program to include government bonds. Banks and transportation companies also pushed benchmark gauges higher on better-than-forecast earnings.

ECB President Mario Draghi said the central bank plans to buy up to 1.14 trillion euros ($1.3 trillion) of private and public securities.

“The ECB is still going to be at the forefront over the next few trading days,” Matt Maley, an equity strategist at Miller Tabak & Co in Newton, Mass. “People are still trying to digest this bazooka blast. Obviously earnings will become more of a focus as well but the key is we need follow-through. It was a nice rally yesterday, but we’ve had a lot of one-day rallies that didn’t really pan out.”

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