Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/money/article/a418053
Signs of stalling US recovery drag shares lower
Falling orders for durable goods in the US add to fears that the recovery in the world's biggest economy is slowing.
Prev Close:
More FTSE charts & pricesPrev Close:
More FTSE charts & pricesPrev Close:
More FTSE charts & pricesby Deborah Hyde on Jul 28, 2010 at 15:27
The FTSE’s morning rally ran out of steam in afternoon deals after new data added to concerns the US recovery is stalling.
At 15.20, the FTSE 100 was 40 points lower at 5326 - having hit a high of 5398 earlier.
The DJIA was 22 points lower at 10515 after durable goods orders numbers confounded expectations of a rise, falling 1% in June.
This was the second consecutive fall and economists say the data - which is seen as a good predictor of the economy - adds to growing concerns about the state of the US economy after some disappointing housing data.
Mixed corporate news in the UK also weighed.
Shares in British Gas parent Centrica fell after its update as profits were boosted by exceptionally cold weather last winter and the company warned the second half will be much weaker. Shares fell 4.2p to 303.8p
Exploration and production group BG Group shares were also 29p lower at £10.34 after its update failed to excite.
BAT said it will grow its profits and dividend but shares ticked lower as shares have outperformed the market by 13% so far this year. Shares fell 68p to £22.43.
Banks started the day in still buoyant mood as recent news on the sector suggests many of the risks to banks have turned out to be less onerous than feared. But by midday profit-takers moved in after a downbeat report from Fitch said investors are concerned about the ability of Europe's banks to refinance their debt.
The survey was completed before the results of EU bank stress tests were announced and before the latest news on capital requirements from the Basel Committee on banking supervision.
Lloyds fell back 3.25p to 69.49p despite some bullish comment on its prospects.
Tools from Citywire Money
More about this:
More from us
Look up the shares
Archive
Today's articles
- Safe havens are in short supply – and only China can help
- Diary of a Top Stocker: 5 quality blue chips I've got my eye on
- The ISA explained once and for all
- Most top performing emerging market funds closed to investors
- You need to take responsibility for your long-term care
- Supergroup tumbles on profit warning; FTSE edges up
- 5 things the Money Advice Service can teach savers
- Singing adviser jailed over tax avoidance scam
From the Forums
- Only BT can really benefit from high speed nationwide broadband
- You can’t evict me for not paying rent - it’s against my human rights!
- Lets out the dogs....................starting with SLI UK Equity unconstrained losses
- How best to access a pension tax-free lump sum?
- Is BSkyB potentially another Kodak?
4 comments so far. Why not have your say?
William Bishop
Jul 28, 2010 at 16:53
If there are really economists who regard US durable goods orders as "a good predictor of the economy", they need a reality check - the monthly numbers notoriously yo-yo all over the place.
report thisPatrick Moylan
Jul 28, 2010 at 17:34
A butterfly farted........ Stocks collapsed.
report thisChris B (Slough UK)
Jul 28, 2010 at 19:59
I'd like to start a rumour here that there is a Major Shortage of Silver (there is) - Price Sky Rockets, but shhhhh don't tell anyone! No but seriously, stocks appear to be trading sideways. I think the view is correct that after earnings season has finished, it will be difficult for prices to push upwards. I would also agree with the seasonal view, that this is also the low point for gold's price. The deflationary forces so far have been nearly absent. The temptation is always going to be there for countries to print even more money as they try to keep up with their out of control spending habits. The only other alternative is Sovereign default (which is the best option, but sadly the last one considered). There is nothing to say that share prices will behave in any way related to the true state of the economies behind them.
Whilst the banks have massive debts, they also currently have massive amounts of cash to throw at or withdraw from the markets (whenever they so feel like it). With this in mind, I feel the banks now have so much control over the markets, along with computer controlled trading, that prices of stocks bear very little relationship to their real true values. This excess is likely to bring more instability and quite likely greater chaos in the future? Of course there has always been some market manipulation, but you can have too much of a bad thing. I still predict that markets will hit bottom by February if not before, but just because it should happen, doesn't mean it will!
report thisRob Morrison
Jul 28, 2010 at 22:15
Having been a private investor for at least forty years, all that has changed is technology. The 'Market' moves in seconds, rather than hours. Must be a benefit to the market makers.........................I am with Patrick Moylan's sentiment!
report thisleave a comment
Please sign in here or register here to comment. It is free to register and only takes a minute or two.