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Wall Street stocks closed weaker as traders returned from the Labor Day long weekend to continuing concerns that the Federal Reserve’s attempts to aggressively tighten monetary policy could put more pressure on the economy.
At the close, the Dow Jones Industrial Average was down 0.55%, the S&P 500 lost 0.41% and the Nasdaq Composite was off 0.74%.
The FTSE 100 closed 13.01 points higher at 7,300.44 as the market appeared to give the benefit of the doubt to the new Prime Minister and her pledges to boost the economy.
Housing group Berkeley gained after saying it was on track to meet full-year profit guidance despite a “volatile” operating environment. Taylor Wimpey and Persimmon also rose.
British and Scottish Gas owner Centrica was higher following a Financial Times report suggesting the energy supplier is in talks to secure billions in additional financing amid rising collateral demands.
Retailers and pub chains bounced back on hopes of a bailout for cash-strapped consumers. JD Sports, Next, B&Q owner Kingfisher, Marks & Spencer, Dunelm, Mitchells & Butlers and Wetherspoons all up.
BT weakened after a downgrade to ‘hold’ from ‘buy’ at Berenberg.
Oil prices fell more than $1 to their lowest since before Russia invaded Ukraine as COVID-19 curbs in top crude importer China and expectations of more interest rate hikes spurred worries of a global economic recession and lower fuel demand.
Brent crude futures fell $1.35, or 1.5%, to $91.48 a barrel by 0420 GMT after slipping 3% in the previous session. The contract hit a session low of $91.35, the lowest since 18 February.
Activity in the UK construction sector contracted again in August amid cost pressures and economic uncertainty, according to a survey released on Tuesday.
The S&P Global/CIPS construction purchasing managers’ index nudged up to 49.2 from 48.9 in July, but remained below the 50.0 mark that separates contraction from expansion. Analysts had been expecting a decline to 48.0.
7am: STV profits rise
Profit before tax at STV rose 25% to £10.6m (£8.5m) for the half year to the end of June. There is a 5% uplift in the dividend to 3.9p from 3.7p.
The board said the diversification strategy continues to deliver, with Studios revenue +16%, VOD advertising revenue +16% and regional advertising revenue +11%
Advertising performance is “broadly as expected” in H1, despite ongoing economic uncertainty, with Total Advertising Revenue (TAR) + 4% (+9% vs 2019).
Simon Pitts, CEO, said: “The advertising market is clearly not going to be immune from the ongoing economic uncertainty, with total advertising up 4% in H1 and forecast to be slightly down for the 9 months to September, but we are expecting a stronger Q4, boosted by the first ever winter football World Cup.”
7am: Capricorn Energy
Simon Thomson, chief executive, Capricorn Energy, said the company is exploring ‘alternative transactions’ while continuing to support the proposed merger with Tullow Oil. Full story here
7am: Vertu Motors
Car retailer Vertu Motors said uncertainty remains around the supply of vehicles and components.
In a trading statement ahead of figures for the half-year to the end of August, it said inflation and energy costs are likely to be factors in the months ahead.
Consequently, profitability is expected to be more weighted to the first half of the financial year. The board currently anticipates that trading performance for the full financial year will be in line with current market expectations.
The group’s order bank for new vehicles remain high, with almost 13,000 new retail orders currently awaiting delivery and strong fleet and commercial order banks also in place. Gross profit generation from the sale of new vehicles is ahead of last year, despite the decline in volumes, due to stronger margins.
Demand for used cars has fallen as the economy came out of lockdown. Gross profits per unit have remained above normal levels, but are lower than the very high levels witnessed in the financial year ended 28 February.