| Markets tentative ahead of economic data
Markets opened tentatively on Thursday morning as investors awaited economic growth figures from both sides of the Atlantic due out later on.
Wall Street benchmarks ended Wednesday's session slightly lower with the S&P 500 finishing in the red for the fifth straight day - its longest losing streak this year - as investors continued to view US budget negotiations in Washington with caution. Markets are hoping that politicians can agree on a extension to the current debt-ceiling limit of $16.7tn ahead of the deadline on October 1st to avoid a government shutdown when the new fiscal year begins.
"There will be a little more focus on economic data on Thursday, with investors in desperate need of a boost following another long drawn out battle over the debt ceiling in Washington," said Market Analyst Craig Erlam from Alpari. "It seems as though optimism is being drained out of investors on a daily basis at the moment, prompting risk assets such as equities to continually grind lower."
The second and final revision of UK gross domestic product growth for the second quarter is expected this morning and is estimated to hold steady at 0.7%, though some analysts are predicting a small upwards revision as a result of the continuing improvement in economic data as of late.
Earlier this month Chancellor George Osborne said the UK economy was “turning a corner” but warned that unemployment and the deficit were “still too high”.
Over in the US, the progress of the economy is also being closely watched amid debt-ceiling talks and the potential of a Federal Reserve stimulus cut next month. The consensus forecast is for an upwards revision to annualised growth of 2.6% from the previous estimate of 2.5%.
Jobless claims figures from the States will also be in focus today given that an improvement in the labour market remains a deciding factor in the decision on whether or not to cut stimulus. Markets are expecting a rise to 325,000 claims for the week ended September 20th from 309,000 the week before, though it should be noted that the prior week's figure was distorted by IT issues in some regions.
"What that means this week is that if the issue has been dealt with, we could see either a huge surge in new claims in California [and Nevada] for last week, or significant revisions to previous figures," Erlam said.
FTSE 100: TUI Travel jumps after raising guidance
A strong high season this summer and heartening early bookings for winter holidays has led tour operator TUI Travel to hike its profit guidance for the full year. TUI shares jumped after it said it was now confident of achieving at least 11% growth in underlying operating profits for the year to end-September.
Tullow Oil also gained early on after announcing a new oil discovery in Northern Kenya. The group said results of drilling, wireline logs and samples of reservoir fluid indicate a potential net oil pay in the Auwerwer and Upper Lokone sandstone reservoirs of between 60 and 100 metres.
Compass Group rose after saying expectations for the full year were unchanged with organic revenues set to have risen by just over 4% and profit margins to have grown slightly.
High Street bookie William Hill was in the red this morning after a profit warning from rival chain Ladbrokes dampened sentiment across the sector.
British Gas owner Centrica and utility group SSE were continuing to fall after yesterday's proposal by Labour leader Ed Miliband to freeze energy bills if the party is voted back into power in 2015.
FTSE 250: Ladbrokes warns on digital profits
Ladbrokes slumped after warning that 2013 profits for its digital operations would come in a long way below current market forecasts. The bookmaker said that it was yet to see “discernible improvements” in its digital business as it works through a process of integration. As a result it said it expected 2013 operating profits to be between £10m and £14m compared with a market consensus of about £27.5m.
Tour operator Thomas Cook also fell sharply after reporting a decline in bookings in the UK over summer and flat sales in Europe. In a trading update ahead of the company’s full-year 2013 results in November, the group said UK bookings were down 3% on last year with a capacity reduction of 2.5%.
Iron ore producer Ferrexpo was a high riser after Macquarie upgraded its rating on the stock to 'neutral' and lifted its target from 155p to 180p
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| FTSE 100 - Risers
TUI Travel (TT.) 362.20p +1.63%
Fresnillo (FRES) 1,021.00p +1.49%
Admiral Group (ADM) 1,244.00p +1.22%
Compass Group (CPG) 839.00p +1.08%
Tullow Oil (TLW) 1,063.00p +0.95%
Tate & Lyle (TATE) 762.50p +0.93%
Rolls-Royce Holdings (RR.) 1,131.00p +0.80%
BAE Systems (BA.) 464.80p +0.76%
G4S (GFS) 249.90p +0.56%
ARM Holdings (ARM) 999.50p +0.55%
FTSE 100 - Fallers
Centrica (CNA) 368.40p -1.92%
Shire Plc (SHP) 2,447.00p -1.21%
Barclays (BARC) 270.15p -1.04%
Aggreko (AGK) 1,581.00p -1.00%
Aviva (AV.) 405.30p -1.00%
Persimmon (PSN) 1,105.00p -0.90%
Aberdeen Asset Management (ADN) 381.90p -0.88%
William Hill (WMH) 401.00p -0.87%
Legal & General Group (LGEN) 201.90p -0.83%
Mondi (MNDI) 1,060.00p -0.75%
FTSE 250 - Risers
Ferrexpo (FXPO) 186.70p +5.24%
AZ Electronic Materials SA (DI) (AZEM) 305.10p +2.21%
Man Group (EMG) 85.40p +2.21%
BH Global Ltd. USD Shares (BHGU) 11.87 +2.06%
Diploma (DPLM) 644.50p +1.90%
Dignity (DTY) 1,421.00p +1.72%
Carpetright (CPR) 668.00p +1.67%
Barr (A.G.) (BAG) 537.50p +1.61%
Polymetal International (POLY) 672.50p +1.59%
Computacenter (CCC) 528.00p +1.54%
FTSE 250 - Fallers
Ladbrokes (LAD) 170.70p -9.25%
Soco International (SIA) 393.70p -8.44%
Thomas Cook Group (TCG) 144.60p -7.07%
ICAP (IAP) 377.50p -2.81%
Mitchells & Butlers (MAB) 420.40p -1.94%
Playtech (PTEC) 729.50p -1.88%
Dunelm Group (DNLM) 958.00p -1.79%
ITE Group (ITE) 272.40p -1.77%
Petra Diamonds Ltd.(DI) (PDL) 117.30p -1.43%
Taylor Wimpey (TW.) 101.10p -1.37%
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INTERIMS
China Food Co, Faroe Petroleum, Inditherm, Judges Scientific, Moss Bros Group, Scisys, Wandisco
INTERIM DIVIDEND PAYMENT DATE
BlackRock World Mining Trust, Direct Line Insurance Group, Low & Bonar, Polymetal International, Prudential, Reckitt Benckiser Group, Schroders, Schroders (Non-Voting), Wood Group (John)
QUARTERLY PAYMENT DATE
Royal Dutch Shell 'A', Royal Dutch Shell 'B'
QUARTERLY EX-DIVIDEND DATE
Dow Chemical Co, Molex Inc., Molex Inc. 'A' Shares
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
GDP (Final) (US) (13:30)
Initial Jobless Claims (US) (13:30)
M3 Money Supply (EU) (09:00)
Pending Homes Sales (US) (15:00)
FINALS
IndigoVision Group
ANNUAL REPORT
MDM Engineering Group Ltd. (DI)
EGMS
International Consolidated Airlines Group SA (CDI)
AGMS
Alpha Strategic, Aortech International, Braveheart Investment Group, Dods (Group) , First Property Group, Foresight 4 VCT, Fulcrum Utility Services Ltd. (DI), GEONG International Ltd., Infrastructure India, Madagascar Oil Ltd (DI), MDM Engineering Group Ltd. (DI), Micro Focus International, Minco, NWF Group, Penna Consulting, Rockhopper Exploration, Shellproof, Zoo Digital Group
TRADING ANNOUNCEMENTS
Mitchells & Butlers, Northbridge Industrial Services, Thomas Cook Group
UK ECONOMIC ANNOUNCEMENTS
Balance of Payments (09:30)
Current Account (09:30)
GDP (quarterly national accounts) (09:30)
FINAL DIVIDEND PAYMENT DATE
Fletcher King
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Dow, S&P 500 fall for fifth straight day on budget concerns
Dow Jones Industrials: -0.40%
Nasdaq Composite: -0.19%
S&P 500: -0.26%
Wall Street benchmarks ended Wednesday's session slightly lower with the Dow Jones and S&P 500 finishing in the red for the fifth straight day as investors continued to view budget negotiations in Washington with caution.
Markets are hoping that politicians can agree on a extension to the current debt-ceiling limit of $16.7tn ahead of the deadline on Tuesday October 1st to avoid a government shutdown when the new fiscal year begins.
"It looks like it is politics that are once again driving what equity markets are doing, and this time it is US politicians who are unsettling markets with their unerring capability of turning a drama into a crisis," said Senior Market Analyst Michael Hewson from CMC Markets. "We saw this play out in 2011 and it looks like history is repeating itself as continued political bickering over the raising of the debt ceiling is understandably making investors nervous in what is becoming a classic case of déjà vu."
However, while many believe that the a deal in Congress will eventually be made to 'kick the can further down the road', Treasury Secretary Jacob Lew said that investor confidence in a deal to raise the limit is probably "greater than it should be". He said: “People have to take seriously that Congress has a lot of work to do in a short period of time.”
Markets were also digesting a raft of economic figures today as investors continue to consider what each piece of data means for the outlook for monetary policy in the aftermath of last week's decision by the Federal Reserve to hold on to stimulus.
Given that data since the surprise decision on September 18th has come in mixed and Fed officials continue to give conflicting comments, equity markets have been rather directionless in recent days and continue to see-saw back and forth, according to CMC's Senior Sales Trader Nick Dale-Lace.
He said: "Good news used to mean good news for the markets, then it became bad news, and now we find ourselves having no idea what it might mean in the short-term as policies and their possible effect on the market become ever more muddied."
Carnival hits the rocks
Carnival declined as Morgan Stanley cut its recommendation to ‘underweight’ from ‘equal weight’ after the cruise line operator reported a decline in third-quarter income and gave a gloomy outlook as it continues to feel the effects of last year’s sinking of the Costa Concordia ship off the coast of Italy.
Noble rallied after the offshore rig contractor said it will turn about half its fleet into a separate company to focus on its higher-priced rigs in deeper waters.
Retail group JC Penney dropped 15% after an analyst at Goldman Sachs said that te company's liquidity levels in the third quarter will be challenged by "weak fundamentals, inventory rebuilding and an underperforming home department". The stock fell to $10.12, its worst level since December 2000.
Orthopedic devices group Stryker announced it is to buy Mako Surgical Corp for $1.65bn for $30 a share, an 86% premium to the latter's closing price on Tuesday. Shares in the Mako, the robotic-assisted surgery technology firm, jumped by over 80%.
Largely neutral economic data
US durable goods orders rose by 0.1% over the month in August, versus the drop of 0.2% which was expected. However, the previous month´s change was revised down to show a fall of 8.1% month-on-month, instead of the 7.3% drop initially reported.
Even so, the key non-defence capital goods, excluding aircraft, orders series showed a 1.5% rise on the month - a solid outcome.
US existing home sales rose to an annualised rate of 421,000 in August, versus the 420,000 expected by economists.
Figures from the Mortgage Bankers Association showed US mortgage applications for the week ended September 20th increased by 5.5% following a gain of 11.2% in the previous week.
S&P 500 - Risers
Seagate Technology Plc (STX) $43.87 +4.95%
Genworth Financial Inc. (GNW) $12.73 +3.92%
Gannett Co. Inc. (GCI) $26.67 +3.57%
First Solar Inc. (FSLR) $40.39 +3.46%
SAIC Inc. (SAI) $15.73 +3.35%
Sears Holdings Corp. (SHLD) $59.72 +3.19%
CF Industries Holdings Inc. (CF) $214.01 +2.90%
Advanced Micro Devices Inc. (AMD) $3.91 +2.89%
Express Scripts Holding Co (ESRX) $62.63 +2.77%
JP Morgan Chase & Co. (JPM) $51.70 +2.74%
S&P 500 - Fallers
J.C. Penney Co. Inc. (JCP) $10.12 -14.96%
Baxter International Inc. (BAX) $66.70 -6.40%
Carnival Corp. (CCL) $32.70 -5.33%
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