Wall Street higher as FTSE 100 closes marginally lower but above 6,000

12pm EST/ 5pm: FTSE 100 closes in red

FTSE 100 index closed marginally lower on Thursday, but above the 6,000 level, as some trader optimism faded and the European Central Bank (ECB) meet was in focus.

Britain’s blue-chip benchmark closed down around nine points at 6,003. The FTSE 250 also closed in the red, down around six points at 17,588.

On Wall Street, stocks were nudging higher as tech stocks continued to do well but jobless claims data pointed to a stalling labour market

“Volatility has been low in US markets so that has been an influence on trading on this side of the Atlantic. The ECB meeting was the main story today and monetary policy was kept on hold – meeting forecasts,” said David Madden, market analyst at CMC Markets in a note.

“The refinancing rate and the deposit rate were left at 0.0% and -0.5% respectively, and the pandemic emergency purchase programme (PEPP) was left at €1.35 trillion. Christine Lagarde, the head of the ECB, said it is likely the full PEPP envelope will be used.”

US and Canada 11.30am EST/4.30pm

Wall Street benchmarks were heading north but not blisteringly in early deals in New York. The Dow Jones Industrial Average added over 24 points at 27,964. The S&P 500 gained over six at 3,405. The tech-laden Nasdaq added nearly 68 points at 11,209. Up in Toronto, the TSX lost over 63 points at 16,319.

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9.40am; Wall Street makes gains

Once again, Wall Street has upended expectations of a lower start as all three main indices posted gains in the early part of Thursday’s session.

In the first 25 minutes of trading, the Dow Jones Industrial Average was 0.59% higher at 28,102 while the S&P 500 was up 0.44% at 3,413 and the Nasdaq climbed 0.66% to 11,215.

Investors appear to have shrugged off the flat yet still elevated US jobless claims figure, while the rise in the tech-heavy Nasdaq may have convinced many that the tech selloff is well and truly over.

7.40am: Wall Street expected to retreat at the open

Following a long weekend break, US stocks have whipsawed lower and then rebounded so far this week, with Thursday set to mark another day splashed with red.

The Dow Jones Industrial Average is predicted to open around 160 points, around 6%, lower with similar declines for the S&P 500 and the tech-powered Nasdaq Composite, having risen 1.6%, 2% and 2.7% respectively on Wednesday.

It’s been a frantic week, said market analyst Craig Erlam at Oanda, with US tech stocks lurching into correction territory, with reports that Japanese behemoth Softbank is betting heavily on the sector in recent months further accelerating the decline.

Despite the previous day’s fight back, “we shouldn’t be lulled into a false sense of security” Erlam said.

“We’ve seen an excessive amount of volatility over the last week and the tech sector has only been set back a month. That’s not to say we’re definitely going to see further sharp falls but it should perhaps be approached with caution.”

This caution comes in sync with gains for gold on Thursday, gaining as the dollar continues to pare recent gains but is dragging its feet, which may be encouraging for gold bulls.

He said the European Central Bank’s (ECBs) policy decision today may have a hand to play in things, with unfounded stimulus expectations having the potential to lead to euro rally that would put further downward pressure on the dollar and giving gold prices a boost.

But over at IG, Chris Beauchamp said the ECB meeting should make at least a passing reference to recent euro strength against the dollar, although he said firm action is unlikely this time.

“Instead we will likely see the bank lay out a path to further easing later in the year, responding as needed if and when the initial rebound from the Covid-19 economic shock begins to fade. Markets looking for a real boost may well be disappointed, bolstering the current negative price action of the past week.”

Four things to watch for on Thursday:

• US initial jobless claims data for the week ending September 5 will be eyed to see if the number of Americans filing for unemployment manages to stay below 1 million for two weeks in a row, having dropped to 881,000 in the previous week
• The US producer prices index (PPI) for August will be eyed to see if they have continued the upward trend following a 0.6% rise in July, which reversed a 0.2% decline in June and was the largest increase in prices at the factory gates since October 2018
• Share price reaction from security software firm ZScaler Inc (NASDAQ:ZS) after its fourth quarter results managed to beat analyst estimates
• At the other end of the scale, investors may be looking to offload shares in video game rental group GameStop Corp (NYSE:GME) after its second quarter numbers fell short of market forecasts

Story by ProactiveInvestors