S&P 500 reaches record high while FTSE gains despite dire unemployment figures
The S&P 500 reached record highs on Tuesday ahead of a packed day of earnings, while the FTSE 100 recovered some of Monday’s losses despite a dire set of unemployment figures.
London’s blue-chip index opened flat before rising 0.4 per cent higher to reach 6,666 points by mid-afternoon, while the benchmark S&P inched 0.1 per cent higher to reach a new high.
It followed a rocky start to the week with the FTSE falling to a three-week low on Monday following a travel stock selloff.
Concerns over the government’s coronavirus policy persists. News that ministers are considering even tougher restrictions on people entering the UK spooked investors. And the selloff continued into Tuesday with Rolls Royce leading this morning’s biggest fallers, plunging eight per cent by mid-morning.
The firm, which is heavily dependent on the return of air travel, this morning lowered its forecasts for the number of hours it expects aircraft powered by its engines to fly this year.
“Concerns over the length of the UK’s current lockdown remain an underlying issue for the index, especially since the Conservative party seem to have shifted their strategy away from the make-and-then-break promises policy of 2020,” Connor Campbell, financial analyst at Spradex.
Investors will be rattled by the latest unemployment figures which showed an estimated 1.72 people were unemployed between September and November 2020.
The new rate of unemployment is now 1.2 per cent higher than it was at the same time last year, with half of that jump coming in the last three months.
And the worst is yet to come as the furlough scheme still props up large swathes of the economy, particularly the hospitality and leisure industry.
European stocks followed the FTSE’s leads clawing back some of Monday’s losses. Germany’s Dax jumped 1.9 per cent while France’s Cac index climbed more than 1.29 per cent.
US stocks rise on busy earnings day
The benchmark S&P 500 reached an intraday all-time peak in early trading amid a busy day of large-cap earnings.
The S&P rose 0.2 per cent while the Dow Jones climbed 0.3 per cent to 31,055 points.
Shares in General Electric soared nine per cent after reporting a profitable 2020 and projecting a jump in adjusted profit margins this year.
Drugmaker Johnson & Johnson, which is working on a coronavirus vaccine, jumped three per cent after earnings topped expectations.
The tech-heavy Nasdaq was trading flat by 2.50pm but it is likely to make significant gains on Wednesday amid a day of tech giants reporting, including Microsoft and Tesla.