Wall Street rises as investors cling to hope of stimulus package
US stocks edged higher after the open today as Wall Street held out for a deal on fiscal stimulus, while the FTSE 100 dipped amid concerns over increasing coronavirus cases in Europe.
The benchmark S&P 500 rose as much as 0.26 per cent in the first half an hour of trading, while the Dow gained 0.18 per cent. The Nasdaq surged ahead, climbing 0.38 per cent.
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Wall Street’s gains come after new data showed a drop in weekly jobless claims, with the number of American citizens claiming unemployment benefits hitting the lowest level since the start of coronavirus lockdowns at 787,000.
Meanwhile the FTSE 100 was flat after shedding as much as one per cent to hit a five-month low in morning trading. The blue-chip index hit 5,775.98 at 3pm. The FTSE 250 rose as much as 0.58 per cent to 17,891.37.
London stocks recovered some of the morning’s losses after Chancellor Rishi Sunak unveiled more support for businesses hit by the pandemic.
In his third major announcement in the space of a month, Sunak told parliament that the government would shoulder more of the burden for paying wages of staff who return part-time to struggling businesses, and would offer more money to hospitality companies and the self-employed.
European equities falter amid fresh coronavirus restrictions
European equities have been shaken by rising coronavirus cases and the resulting new restrictions.
Germany’s Dax was 0.22 per cent lower. France’s CAC 40 was broadly flat and the European Stoxx 600 fell 0.08 per cent.
Markets are yet to see the disruption of early March, however, when indices plunged dramatically. Nonetheless, investors are warier of risk assets with so much uncertainty around the future of economies.
“The FTSE 100 is now trading around its lowest levels since the spring amid a second wave of coronavirus, and all the economic hardship it could involve, and political uncertainty on both sides of the Atlantic,” said Russ Mould, AJ Bell investment director.
Internationally-focused stocks struggled amid worries over coronavirus and the global economy.
Defence firm BAE systems shed 4.82 per cent. Miners Glencore and Antofagasta, oil major Shell and jet engine maker Rolls Royce all fell over one per cent.
Global investor sentiment has also been buffeted by uncertainty over a possible next round of US stimulus, as talks continue to show little progress.
President Donald Trump cast doubt on the deal yesterday. And many Republicans in the Senate are resolutely opposed to anything like the roughly $2 trillion (£1.5 trillion) deal the Democrats are after.
Fiona Cincotta, market analyst at City Index, said: “The lack of progress towards additional US stimulus frustrates and unnerves investors.”
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The pound soared yesterday after the UK and EU restarted Brexit talks, holding back the FTSE 100.
It was down 0.2 per cent this morning to $1.312, however, with investors taking a step back after its solid rise yesterday.