UKX FTSE 100 Index

By Carla Mozee, MarketWatch

Shares of Lloyds and Unilever advance

U.K. stocks trimmed gains Wednesday as investors assessed a mixed reading on U.K. economic growth, but Lloyds Banking Group PLC and Unilever PLC held to higher ground after the lender posted a profit surge and the Dove soap maker said its launching a strategic review.

The FTSE 100 picked up 0.1% at 7,281.07, but losses among basic materials and oil and gas shares contributed to holding the overall gain in check. The London index on Tuesday shed 0.3% (http://www.marketwatch.com/story/ftse-100-in-the-red-as-hsbc-slides-but-bhp-billiton-advances-2017-02-21).

The immediate reaction in equities was muted early Wednesday after U.K. gross domestic product for the fourth quarter was upwardly revised to 0.7% (http://www.marketwatch.com/story/uk-economy-stronger-in-4th-quarter-than-thought-2017-02-22) by the Office for National Statistics. But signs of weakness in the report included a decline in business investment and slowing in consumer spending during the last two months of 2016.

"The confirmation of strong overall growth momentum towards the end of last year is, of course, encouraging. But we reckon that headwinds to business and, in particular, household spending will blow harder this year. And we question whether a sterling-related boost to net trade completely offset these headwinds," said Chris Hare, economist at Investec, in a note.

"For that reason, we maintain our view that the economy will slow down, albeit modestly, over the next year or two."

Banks: Lloyds shares (LLOY.LN) (LLOY.LN) popped up 4.6% after the lender said pretax profit more than doubled to GBP4.2 billion ($5.2 billion), as it reduced the amount set aside to cover compensation for customers sold payment-protection insurance (PPI) they didn't need. Lloyds also carried out a program of cost cuts, including the closure of branches.

Lloyds said it will pay a total ordinary dividend of 2.55 pence a share, up 13% from a year ago. It will also issue a special dividend of 5 pence per share.

On the heels of Lloyds report, HSBC shares (HSBA.LN) (HSBA.LN) (HSBA.LN) rose 1.3%. The shares on Tuesday dropped 6.5%, their worst decline since March 2009, after the Asia-focused bank reported a wider fourth-quarter net loss of $4.23 billion. (http://www.marketwatch.com/story/hsbc-loss-widens-to-423b-plans-further-buyback-2017-02-21)

But other bank shares turned lower in afternoon trade, with investors set to look for any indication that borrowing costs in the U.S., the world's largest economy, are poised to be raised when the Federal Reserve meets next month. Minutes from the Fed's most recent meeting are due at 7 p.m. London time.

Shares of Barclays PLC (BCS) (BCS) , whose financial results are due Thursday, were down 0.8%. Shares of Royal Bank of Scotland PLC (RBS.LN) (RBS.LN) and Standard Chartered PLC (STAN.LN) were each off 0.7%.

See:What to expect in Barclays earnings (http://www.marketwatch.com/story/what-to-expect-in-barclays-earnings-2017-02-20)

Movers: Unilever PLC (ULVR.LN) (ULVR.LN) gained 4.1% after the consumer products heavyweight said it's conducting a "comprehensive" review (http://www.marketwatch.com/story/unilever-launches-strategic-review-of-operations-2017-02-22)to pump out more value for shareholders. Just days before, Unilever rejecting a $143 billion offer from Kraft Heinz Co. (KHC) .

Barratt Developments PLC shares (BDEV.LN) were up 0.7%. The home builder posted an 8.8% rise in first-half pretax profit to GBP321 million (http://www.marketwatch.com/story/barratt-to-increase-shareholder-returns-2017-02-22) and said it would return a higher proportion of its earnings through dividend payments.

The pound was buying $1.2465 compared with $1.2460 late Tuesday in New York.

(END) Dow Jones Newswires

February 22, 2017 10:25 ET (15:25 GMT)

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