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Gains trimmed on cautious outlook | Next in line | Barratt upbeat


10pm: Wall St in reverse

US stocks fell sharply, led by technology and other growth stocks, as investors assessed the implications of Federal Reserve’s most aggressive tightening of monetary policy in more than two decades.

At the close, the S&P 500 was 3.56% softer, the Dow Jones Industrial Average was down 3.12%, while the tech-focused Nasdaq Composite was 4.99% weaker.

5pm: Caution creeps in on downbeat outlook

The FTSE 100 index edged higher to post a gain of 9.82 points to 7502.27, but well off its 7619.39 peak earlier in the session when investors followed overnight exuberance on Wall Street.

The index flew out of the traps this morning to run up a three-digit gain after US markets enjoyed their best day in two years on the back of Fed comments that interest rate hikes may not be as severe as expected (see below).

But the mood turned gloomier as London traders assessed the Bank of England’s downbeat forecast which also dragged the pound lower in spite of the rise in interest rates to 1%.

Wall Street nervousness returned after the latest weekly US jobless claims released today showed a surprise rise to 200,000, up from 181,000 the week before.

Around London’s close, the Dow Jones Industrial Average was 2.9% lower, while the broader S&P 500 index dropped 3.4%, and the tech-laden Nasdaq Composite plunged 4.5%.

Back in London, NatWest, Lloyds Banking and HSBC ended down 4.5%, 3.6% and 1.4% respectively., In the FTSE 250 Virgin Money fell 10% despite reinstating its interim payout and posting a sharp profit rise.

Newspaper publisher Reach plunged 21% after it reported a fall in revenue. The Daily Record and Daily Mirror publisher explained that the market has experienced reduced advertiser demand in the last two months.

Full story behind the rise, outlook and reaction here

7am: Next in line

Fashion and home interiors chain Next said full price sales were up 21.3% in the the 13 weeks to 30 April against the same period last year, in a statement that offered backing to the battered high street. 

Online sales fell 11% against the same period a year ago.

The company is maintaining its guidance for full year profit before tax at £850m, which would be up 3.3% on last year. 

The figures reassured investors that the company will not resort to discounting.

Shares, which have been under pressure despite a buyback campaign, rallied 40p to 6126p. 

9am: Car sales down

The car market continues to be hit by supply problems, with registrations falling by 15.8% to 119,167 units in April, according to the latest figures from the Society of Motor Manufacturers and Traders.

The figures are driven primarily by a 33.3% decrease in large fleet registrations as manufacturers prioritise private consumers which helped this market report a modest increase of 4.8%.

7am: Reach sees flat revenue

Newspaper group Reach, publisher of the Daily Record and Daily Express, said it anticipates broadly flat group revenue for the year, though with a higher mix of circulation revenues and lower digital contribution than previously expected as a result of more challenging trading conditions.

In a trading update, the group said: “Over the past two months the market has experienced reduced advertiser demand and lower average yields, with the war in Ukraine significantly reducing the level of ‘brand safe’ content for news publishers. While this has led to lower growth than expected, we are improving the quality of our digital sales.”

Full story here

7am: Shell profit soars

Oil and gas giant Shell has reported soaring profits following a surge in prices.

Shell posted $9.13bn (£7.3bn) in the first three months of the year, nearly three times its $3.2bn profit for the same period last year.

The company will take a $3.9 billion post-tax hit in Q1 2022 from its withdrawal from Russia.

The first quarter dividend is increased by 4% to $0.25 per share.

Chief executive Ben van Beurden said: “Generating value through strong earnings and cash flow, coupled with maintaining a healthy balance sheet and continuing the disciplined delivery of our strategy, are crucial for Shell to play a leading role in the energy transition.

“This allows us to support our customers as they shift to cleaner energy. It’s also the best way for us to contribute to the security of energy supplies.”

See also: Oil and gas firms to invest £250bn in low carbon energy

7am: Virgin Money profits up sharply

Consumers are using credit cards more often, according to Virgin Money, which has helped fuel a sharp rise in its half-year profits.

An interim dividend of 2.5p per share has been declared (H1 2021:nil).

Full story here

7am: Barratt upbeat

Total forward sales (including JVs) as at 1 May were 6.6% ahead of 2021. The value of total forward sales was 18.6% ahead of 2021. Reflecting the strength of the reservation rate, the house builder is fully forward sold for FY22.

David Thomas, chief executive, said demand remains strong across the country. “We expect to deliver full year trading results in line with the board’s expectations as we remain focused on growing towards our medium-term target of 20,000 homes a year.” he said.

Global markets

The US Federal Reserve yesterday raised interest rates by 0.5% to between 0.75% and 1%, the largest single hike since May 2000 and afterwards Fed chairman, Jerome Powell, said: “Inflation is much too high and we understand the hardship it is causing and we are moving expeditiously to bring it back down.”

Wall Street roared higher on the announcement and relief that the Fed is “not actively considering” a rumoured 0.75% for June or July. The Dow Jones Industrial Average was up 2.9%, over 900 points, while the S&P 500 rose 3.1% and the tech-heavy Nasdaq Composite 3.3%.

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