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London open: Stocks gain as US jobless claims allay fears
London stocks gained in early trade on Friday following a positive session on Wall Street, as stronger-than-expected jobless claims numbers eased concerns about the US economy.
At 0835 BST, the FTSE 100 was up 0.3% at 8,169.54.
Richard Hunter, head of markets at Interactive Investor, said: “In the US, the initial jobless claims number – which on a weekly basis is of limited interest to investors – took on fresh significance, with the better-than-expected reading breathing new life into what has generally been a positive year for markets.
“It adds to a pleasing service sector report earlier this week, implying that perhaps the non-farm payrolls figure was an exception to the rule, and that the US will be able to manage a soft economic landing after all.”
In equity markets, heavily-weighted miners were on the rise, with Anglo American, Antofagasta, Glencore and Rio Tinto all up.
Hargreaves Lansdown advanced after it agreed to be taken over by private equity firms CVC Group, Nordic Capital and Abu Dhabi’s sovereign wealth fund in a £5.4bn deal.
Bellway was in the black as the housebuilder said it expected to return to growth in fiscal 2025 if market conditions remain stable, with signs of an upturn in the market after the recent cut in interest rates.
The company said total housing completions fell to 7,654 homes in the year to July 31 from 10,945 a year ago at an overall average selling price of around £308,000 compared with £310,306 in 2023 – both slightly ahead of previous guidance.
Housing revenue came in at £2.35bn, down from £3.4bn and the underlying operating margin is expected to be around 10% against 16.0% last year.
Rightmove also rose after it said late on Thursday that it had reached a new agreement with OpenRent.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Easyjet Plc | +2.98% | +12.60 | 435.90 |
| 2 |  |
Antofagasta Plc | +2.76% | +50.00 | 1,864.00 |
| 3 |  |
Anglo American Plc | +2.75% | +61.00 | 2,283.00 |
| 4 |  |
Glencore Plc | +2.60% | +10.50 | 413.70 |
| 5 |  |
Rightmove Plc | +2.59% | +13.80 | 546.20 |
| 6 |  |
United Utilities Group Plc | +2.56% | +24.80 | 992.60 |
| 7 |  |
Hargreaves Lansdown Plc | +2.32% | +25.00 | 1,102.50 |
| 8 |  |
British Land Company Plc | +2.09% | +8.20 | 400.80 |
| 9 |  |
International Consolidated Airlines Group S.a. | +2.00% | +3.30 | 168.05 |
| 10 |  |
Rolls-royce Holdings Plc | +1.99% | +9.50 | 486.30 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Gsk Plc | -0.48% | -7.50 | 1,552.50 |
| 2 |  |
British American Tobacco Plc | -0.25% | -7.00 | 2,796.00 |
| 3 |  |
Unilever Plc | -0.23% | -11.00 | 4,770.00 |
| 4 |  |
Bae Systems Plc | -0.19% | -2.50 | 1,282.00 |
| 5 |  |
Smith & Nephew Plc | -0.08% | -1.00 | 1,176.50 |
| 6 |  |
Nmc Health Plc | -0.00% | -0.00 | 938.40 |
| 7 |  |
Shell Plc | -0.00% | -0.00 | 1,894.60 |
| 8 |  |
Just Eat Plc | -0.00% | -0.00 | 861.00 |
| 9 |  |
Standard Life Aberdeen Plc | +0.00% | +0.00 | 274.10 |
| 10 |  |
Micro Focus International Plc | +0.00% | +0.00 | 532.00 |
US close: Stocks surge as jobless claims data eases macro fears
US stocks bounced back strongly on Thursday as better-than-expected data from the labour market eased investors’ concerns about an impending recession.
Nevertheless, markets still remains well below levels seen last week following the dramatic three-day sell-off between last Thursday and Monday that saw more than 2,000 points (-5.2%) wiped off the Dow Jones Industrial Average.
The Dow finished Thursday’s session up 1.8% at 39,446.49, with just three of its 30 constituents registering losses. Meanwhile, the S&P 500 surged 2.3% to 5,319.31 and the Nasdaq jumped 2.9% to 16,660.02. For the S&P 500 in particular, this was the index’s best daily gain since November 2022.
Labour market in focus
Thursday’s primary focus was on this week’s jobless claims report, which revealed Americans lined up for unemployment benefits at a decelerated pace in the week ended 3 August.
According to the Labor Department, initial jobless claims fell by 17,000 to 230,000, below market expectations for a print of 240,000, easing from their post-Covid peak but remaining significantly above this year’s average. Continuing claims increased by 6,000 to 1.875m, while the four-week moving average, which aims to strip out week-to-week volatility, increased by 2,500 to 240,750.
Ryan Brandham, head of global capital markets for North America at Validus Risk Management, said the data “serves as an encouraging sign after last week’s very weak print. This improvement is likely to reassure markets, which are on edge after Monday’s large equity selloff and bond rally.
“However, the underlying trend in claims is still higher, which shows a softening US labor market and a generally slowing US economy. A soft landing is still in sight, although markets are at risk of overreacting and experiencing bouts of volatility, sometimes in both directions.”
In other news, US wholesale inventories increased 0.2% to $903.0bn in June, according to the Census Bureau, in line with preliminary estimates and following a downwardly revised 0.5% increase in May. Non-durables inventories rose 0.7% in June, while durable goods stocks fell 0.1%.
Warner Bros Discovery hits record low
Shares in Warner Brothers Discovery plunged 9% to $7.02 after it revealed it had taken a massive $9.1bn non-cash impairment charge at its networks division as it prepares to part ways with the NBA. The entertainment company also missed estimates with its second-quarter results, pushing shares down briefly to $6.73 – a record low since the merger of WarnerMedia and Discovery Inc in April 2022
Online dating company Bumble tanked 29% after slashing its full-year revenue outlook amid growth fears, after second-quarter results missed expectations.
Eli Lilly jumped 9% after lifting its full-year revenue forecast by $3bn on the back of a strong second quarter, driven by the robust performance of its blockbuster weight loss and diabetes drugs Zepbound and Mounjaro.
Under Armour’s stock rose by almost a fifth after the athletic apparel group posted quarterly earnings that beat on both the top and bottom lines.
Friday newspaper round-up: Drax, X, Lord Saatchi
The Drax power station was responsible for four times more carbon emissions than the UK’s last remaining coal-fired plant last year, despite taking more than £0.5bn in clean-energy subsidies in 2023, according to a report. The North Yorkshire power plant, which burns wood pellets imported from North America to generate electricity, was revealed as Britain’s single largest carbon emitter in 2023 by a report from the climate thinktank Ember. – Guardian
A global advertiser alliance has discontinued its corporate responsibility program after a lawsuit from Elon Musk’s X accused the group of orchestrating a “massive advertiser boycott”. The World Federation of Advertisers (WFA) told members on Thursday that it would shut down the Global Alliance for Responsible Media (Garm) following legal attacks from X, formerly Twitter, according to Business Insider, which first reported the news. Garm is a not-for-profit initiative within the WFA that helps brands avoid advertising alongside or monetizing harmful content. – Guardian
Advertising tycoon Lord Saatchi’s bid for The Telegraph has been rejected after the Abu Dhabi fund selling the newspaper said it was not a serious offer. Lord Saatchi tabled an indicative £350m bid alongside Lynn Forester de Rothschild, a former director of The Economist Group. However, his approach has not made it through to the second round of an auction, which is being overseen by bankers at Robey Warshaw and Raine Group. – Telegraph
The Universities Superannuation Scheme sold its entire £80 million holding of Israeli bonds between February and July this year. Britain’s biggest private sector pension scheme said the decision to sell all its Israeli government bonds had been taken on financial grounds alone and was not the result of a move to completely divest from the country. – The Times
News Corporation beat Wall Street expectations for fourth-quarter revenue after growth in subscriptions at Dow Jones and a rise in sales generated from digital real estate services. Revenue at the media company, which owns publications including The Times and The Sunday Times, The Wall Street Journal, The Sun and The Australian, increased by 6 per cent to $2.58 billion in the three months to the end of June, ahead of analysts’ estimates. – The Times
