A roundup of trading on major world markets:
NEW YORK - Wall Street has cooled off as disappointing quarterly reports from tech stalwart Intel and from transportation companies stalled momentum in a US corporate earnings season that has been better than feared.
The S&P 500 and Dow industrials pulled back from record highs on Thursday and the Dow snapped a nine-session streak of gains.
Southwest Airlines fell 11.2 per cent and led other airline stocks lower after the company forecast a drop in a key profitability metric. Union Pacific dropped 3.4 per cent after the No. 1 US railway posted a lower quarterly net profit, hurt by slumping freight volumes.
The stocks dragged down the Dow Jones transport index , which is often seen as a barometer of the market's health and the overall economy.
"You've got some weakness in that important group, and the broader market might be taking some cues from that," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
The Dow Jones industrial average fell 77.8 points, or 0.42 per cent, to 18,517.23, the S&P 500 lost 7.85 points, or 0.36 per cent, to 2,165.17 and the Nasdaq Composite dropped 16.03 points, or 0.31 per cent, to 5,073.90.
The recent rally has pushed the S&P 500 to fresh all-time records after failing to reach such highs for more than a year, putting the benchmark index up about 6 per cent in 2016.
LONDON - European stocks edged mainly lower, as a drop in the shares of major airlines offset gains in some banks, propped up by signals of support for the sector from the European Central Bank.
The pan-European STOXX 600 index and similar FTSEurofirst 300 both closed 0.1 per cent lower.
Airline stocks fell amid fears some consumers may avoid travelling abroad for holidays after last week's attack in Nice, for which militant group Islamic State claimed responsibility, and attempted coup in Turkey.
Lufthansa slid six per cent after issuing a profit warning. Air France-KLM fell 4.1 per cent and easyJet dropped 5.3 per cent after posting lower revenues.
"The airline sector is under pressure. We don't own any airline stocks for now and we prefer the tech and healthcare sector," said Francois Savary, chief investment officer at fund management and consultancy firm Prime Partners.
Euro zone bank stocks rose as the ECB, which kept interest rates on hold at a policy meeting on Thursday, signalled its intent to address some of the problems in the sector, which has slumped 27 per cent in 2016.
ECB President Mario Draghi said a state-funded backstop may be part of the solution to managing the problem of high levels of bad loans in the banking system.
"He said they need to tackle non-performing loans, which has helped bank stocks a bit, but it's still not much in terms of concrete measures," said Clairinvest fund manager Ion-Marc Valahu.
London's FTSE 100 fell 29.10 points, or 0.43 per cent, to 6,699.89 but germany's DAX gained14.20 points, or 0.14 per cent, to 10,156.21.
HONG KONG - Asian stocks climbed to nine-month highs, helped by a recovery in global oil prices, while the US dollar strengthened against the safe-haven yen on resurgent expectations of a US interest rate rise this year.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 per cent, its highest level since October 2015 after earnings overnight helped push both the Dow Jones Industrial Average and the S&P 500 to record highs. It has gained 10 per cent over the past month.
Leading regional gainers was Japan's Nikkei stock index, which rose 1 per cent, aided by a weaker currency and growing expectations of fresh government stimulus.
Several media such as Mainichi Shimbun and Kyodo News Agency reported that the Japanese government is to compile a stimulus package of at least Y20 trillion ($A250.31 billion) to help the economy emerge from deflation and fend off possible adverse effects of Brexit.
"What the market wants now is both fiscal and monetary policy and such expectations are getting higher," said Hikaru Sato, a senior technical analyst at Daiwa Securities.
The Nikkei 225 rose 128.33 points, or 0.77 per cent, to 16,810.22, Hong Kong's Hang Seng gained 118.01 points, or 0.54 per cent, to 22,000.49 and China's Shanghai Composite Index lifted 11,11 poisnt, or 0.37 per cent,to 3,039.01.
WELLINGTON - The S&P/NZX50 Index rose 41.39 points, or 0.58 per cent, to 7,214.05.