Investors call an end to week-long rally, cash in

Investors are calling an end to the past week's remarkable rally, with many cashing in on stocks Wednesday despite more strong economic data out of the US.

A US government report showed retail sales grew 1.1% in January from the previous month, almost twice as much as analysts’ forecasts for a 0.6 percent gain. The rise showed consumer spending, which makes up for about three quarters of economic activity in the US, was unfazed by tax increases.

But the good news was not enough to encourage investors to keep buying into a stock market that has been rallying steadily for a week, pushing the Dow to break multiple records and many other indexes to multiyear highs.

By midafternoon in Europe, Britain's FTSE 100 was down 0.8% at 6,458.95 while Germany's DAX was flat at 7,966.69. France's CAC40 fell 0.2% to 3,833.31.

Wall Street opened lower, with the Dow down 0.2% at 14,427.58 after closing higher for eight consecutive days. The broader S&P 500 slipped the same rate to 1,549.98.

Market sentiment had been dented earlier in the day, when official statistics showed that industrial production across the 17-country eurozone fell by 0.4% in January, worse than analysts' predictions for an unchanged reading. Both Germany and France, the two industrial powerhouses in the region, registered drops in production, suggesting the sector is contributing to keeping the eurozone in recession.

“January's fall in eurozone industrial production is a timely reminder that, despite the improvement in business and financial market sentiment, the region is likely to have remained in recession in the first quarter,” said Ben May, analyst at Capital Economics in London.