Record-breaking Wall St leaves Footsie in shade
WALL Street traders put a sedate London market in the shade last night by breaking records again across the Atlantic on hopes of an interest rate cut. The Dow Jones Industrial Average smashed through the 27,000 mark for the first time as excitement built over lower rates and higher profits. US markets were in a tizzy at the end of last week when jobs data turned out to be better than expected. Analysts thought this made it less likely for interest rates to be cut.
And as a rate reduction tends to boost share prices, it sent the markets tumbling.
But comments this week from US Federal Reserve chief Jerome Powell that a cut is still on the horizon have reassured America’s traders and stoked a recovery.
The Dow, which is an index of 30 of America’s biggest companies, reads like a roster of US overseas corporate influence, with bigname firms such as Visa, Disney, McDonald’s, Coca- Cola and Apple. President Trump, who has often attributed Wall Street’s impressive performance under his tenure to his administration’s tax cuts, summed up the jubilant tone, tweeting: ‘ Dow just hit 27,000 for first time EVER!’
It closed up 0.85pc, or 227.88 points, at 27,088.08. And the S&P
500 notched up a record of its own, closing within touching distance of the 3,000 mark at 2999.91, up 0.23pc, or 6.84 points.
On the other side of the Atlantic, the FTSE 100 was more lacklustre. It closed down 0.28pc, or 20.87 points, at 7509.82, while the midcap FTSE 250 edged 0.12pc higher, up 23.78 points, to 19,443.16.
Ocado was the biggest faller on the Footsie, shedding 6.2pc, or 75p, to 1140p, a day after announcing that a fire at its hi-tech warehouse in Hampshire earlier this year had cost it £ 100m and knocked its sales growth.
On top of that, boss Tim Steiner yesterday told the BBC it was impossible for his firm to prepare for long delays at borders if Brexit proves to be disruptive.
Steiner told BBC Radio 4’ s Today Programme that to store up a week’s worth of inventory, it would have to double the size of its facilities.
There was a more tepid response than might have been expected to news that the Royal Navy had blocked efforts by three Iranian ships to approach a BP oil tanker on its passage through the Strait of Hormuz.
Any escalation of tensions in the region, which is a key shipping route for Middle East oil and gas, is likely to send the oil price higher as it immediately raises worries that supply could be disrupted.
Oil prices, though, had risen more than 4pc the day before after data showed the US had built up less of a stockpile than forecast and will therefore have to buy extra, meaning suppliers can charge more. The value of a barrel of Brent crude was up again last night, at around $67 a barrel, while US crude was up 0.5pc at $61. Traders in energy giants BP and
Shell were nonplussed. BP rose 0.02pc, or 0.1p, to 545.8p, while Shell fell 0.04pc, or 1p, to 2606.5p.
Holiday stocks were boosted by Jet2 owner Dart Group saying it was ‘ simply untrue’ that Brits have stopped going abroad. The company’s revenues rose 32pc to £3.1bn, while profits jumped by more than a third to £178m.
This lifted shares by 4.5pc, or 38p, to 880p, and pushed Thomas
Cook 10.4pc, or 1.25p, higher to 13.28p, and BA-owner IAG 0.9pc up, or 4p, to 450.9p. Mid- cap defence companies
Meggitt and Cobham got boosts from better broker ratings. Goldman Sachs helped lift Meggitt shares by 2.6pc, or 13.6p, to 541.8p, as it upgraded from ‘ neutral’ to ‘buy’. Cobham jumped 2.6pc, or 2.95p, to 115.65p after it was upgraded by brokers at Barclays.