Wall St recovery calms markets
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.London shares took their lead from Wall Street again yesterday, with the FT-SE 100 index closing 25.9 points higher as Tuesday's frayed nerves were soothed in New York by better-than-expected earnings figures from Intel, the microchip manufacturer.
Much of the volatility earlier in the week had been put down to worries over the health of the technology sector, which has been such a strong driving force behind the bull run of the past two years in America. Good figures from Intel were backed up by better-than-expected results from Ford and GE.
Concerns about earnings drove Nasdaq, the secondary market on which many technology stocks are listed, down 4.5 per cent in the first two days of the week but it recovered ground yesterday, as did the Dow Jones index of 30 leading stocks, which rose 71 points in the first 10 minutes of trading yesterday before settling to more modest gains, ending the day 18.12 ahead at 5,376.88.
After the market had closed, Apple Computer reported a $39m third-quarter loss, better than industry analysts expected, and said its turnaround was on schedule.
The loss, equivalent to 26 cents a share, compared with analysts' forecast of a $1.07 loss per share. Apple shares gained more than a dollar to $18 in after-hour trading.
Shares generally were helped by a second consecutive rise in the US bond market, which shrugged off unexpectedly strong house building statistics in June. The market considered the 1.3 per cent rise in the annual rate no more than a blip in an otherwise slowing picture, focusing instead on a 2.5 per cent decline in housing permits, and held on to the hope that US interest rates could edge lower.
One fund manager believed the stock market's rout in recent days could add to the slowing in the US economy and increase the chance of lower rates. "The public is getting a little taste of what the stock market can do to their perceived net worth."
A full fifth of the rise in the FT-SE 100 index was accounted for by rises in BAT, up 13p to 498p, and BP, up 7.5p to 592.5p, as investors looked for value among shares hit hardest by the gyrations on Wall Street earlier in the week. Analysts said a withdrawal of cash from mutual funds would be felt most by British stocks with heavy US shareholdings, such as the oil companies, drug stocks and conglomerates such as Hanson.
The UK market was also supported by smaller-than-expected rises in average earnings in June, although the benefit was offset by the issue of minutes of the June meeting between Kenneth Clarke and Eddie George. Analysts believe the difference of opinion made a further cut in the short term extremely unlikely.
Market Report, page 22
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments