View the article online at http://citywire.co.uk/money/article/a648132
Markets waver as cliff doubts grow
US markets open lower as investors lock in profits after yesterday’s rally in the wake of a deal to see off the dreaded ‘fiscal cliff’.
(Update) The morning after the night before. Wall Street slipped lower on Thursday as investors sought to lock in profits after yesterday’s euphoric rise in the wake of a deal to see off the dreaded ‘fiscal cliff’.
Markets around the world had started the New Year on a high after the House of Representatives passed a bill that, among other things, prevents sweeping tax rises for Americans, instead targeting only the very wealthiest.
But even amid yesterday’s rally – which saw Britain’s FTSE 100 finally push above 6,000 – market commentators, the International Monetary Fund and ratings agencies were fretting over the next bumps in the road: a deal on preventing spending cuts has been postponed for two months, while US politicians still must tackle their debt ceiling and 2013 federal budget.
For more information read our Fiscal Cliff Q&A.
The mood was therefore less buoyant on Thursday. European markets wavered throughout the morning, with the FTSE 100 flat at 6032. The euro, which had gained ground as a ‘risk-on’ mood gripped markets yesterday, was sharply lower, down 0.66% at $1.3100.
The Dow dropped by 0.35% in early US trading, to 13,365.
Any losses were capped by data on private employment in the US, which came in better than expected. Employers added 215,000 jobs in December, the ADP report showed. The US government meanwhile reported that first-time jobless claims rose by 10,000 to 372,000, though the figures are for the volatile week over the Christmas period.
There was also more upbeat news from China, where data showed accelerating growth in the country's services sector in December. The official PMI reading provides more evidence that the world's second largest economy has overcome 'hard landing' fears.
In the UK, data from Nationwide showed that house prices edged 0.1% lower in December, marking a 1% decline for 2012 as a whole. The building society predicted that house prices would remain 'flat or modestly lower' in 2013.
On London markets, Next (NXT.L) headed the risers, with shares up 3.6% to £39.09 after announcing sales were broadly in line with expectations in the weeks before Christmas, while upping its full-year profit forecast. Freddie George of Seymour Pierce predicted that the high street fashion retailer would continue to profit: 'We believe the company was one of the winners over Christmas helped by a strong range geared to the colder weather'.
Compass Group (CPG.L), the catering business, featured at the other end of the blue chip index, down 1.8% to 724p after analysts at Espirito Santo cut their rating on the shares from 'buy' to 'neutral'.
News sponsored by:
Making the most out of Europe’s potential means seeing things differently. Learn more about how BlackRock’s focused approach to investing in Europe helps investors unlock the continent’s vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the shares
More from us
- FTSE breaks through 6,000 after US averts dreaded fiscal cliff
- Fiscal cliff Q&A: what does it mean for investors?
- Fiscal Cliff Q&A
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.
by Gavin Lumsden on Dec 08, 2016 at 10:33