Wall Street shares up as FTSE 100 closes firmly lower

12pm EST: Footsie plunges 1.7%

FTSE 100 index closed firmly lower on the first day back after the long August weekend, as stronger sterling and a poor performance from banking and energy stocks weighed on the benchmark.

Britain’s top share index closed down over 101 points, or 1.7% at 5,862 – the weakest close for three months.

The FTSE 250 also tanked, shedding over 202 points, or 1.14% at 17,586.

“Diageo, GlaxoSmithKline, AstraZeneca, Ashtead and Unilever all derive a large portion of their revenue from overseas, so the push higher in the pound usually hits the stocks. The declines in Royal Dutch Shell, BP, HSBC and Lloyds are weighing on the British benchmark too,” said David Madden, analyst at CMC Markets.

US and Canada 4.30pm/11.30am EST

Wall Street shares were higher in early deals in New York. The Dow Jones Industrial Average advanced over 72 points at 28,502. The broader-based S&P 500 added almost 10 at 3,510. The tech-heavy Nasdaq exchange soared over 101 points at 11,876. Up in Toronto, the TSX advanced over 45 points at 16,560.

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As expected, the main Wall Street indices got off to a mixed start on Tuesday, with the Nasdaq leading the way while the Dow fell back into the red.

Shortly after the opening bell, the tech-dominated Nasdaq was up 0.56% at 11,840 followed by the S&P 500 which was 0.02% higher at 3,500. Meanwhile, the Dow Jones Industrial Average was down 0.35% at 28,331.

Despite a strong pre-market, expectations of further rises from electric car maker Tesla Inc (NASDAQ:TSLA) were dashed by the time the markets opened after the firm disclosed plans for a US$5 billion stock offering, sending its shares down 2.4% to US$486 in early deals.

8.00am: Wall Street to open mixed

Tesla’s inexorable rise is set to propel the NASDAQ Composite higher again when trading starts in New York on Tuesday.

In Monday’s session, the NASDAQ rose 80 points to 11,775 on a day when the Dow and the S&P lost ground and today it is set to continue its upward path, with spread betting quotes suggesting it will open 440 points higher.

Today, it may even have the S&P 500 coming along for the ride as the 500-share index is expected to open 9 points higher at 3,509. The Dow Jones Industrial Average is expected to be more subdued, with a fall of around 8 points to 28,422 on the cards.

The stock of Tesla, the electric vehicle maker, split overnight, which will result in the shares being cheaper (if only you could do the same for the cars), with existing shareholders owning more shares in compensation.

The company’s capitalisation now surpasses that of credit card group Visa and next in its sights, according to the Marketwatch news agency, is Berkshire Hathaway, the company helmed by the value-based investment guru, Warren Buffett.

Quite what the Sage of Omaha thinks of Tesla’s lofty valuation is anyone’s guess; we know what broker RBC thinks of it because it told us the company is “fundamentally overvalued”.

However, that did not stop RBC Capital increasing its target price to US$290 from US$170.

Five things to watch for on Tuesday:

• The final US manufacturing PMI reading for August, which is expected to reach 54.7, up from 50.9 in July and marking the strongest increase in factory activity since July last year
• Continued share price raises from Tesla Inc (NASDAQ:TSLA) and Apple Inc (NASDAQ:AAPL) after the two heavyweights completed stock splits on Monday
• Reports on US construction spending for July and motor vehicle sales, providing more clarity on the state of the American economy
• Earnings from customisable teddy maker Build-A-Bear Workshop Inc (NYSE:BBW), which could have seen its fortunes suffer during the pandemic due to its highly touch-based shopping model as well as a slowdown in consumer spending
• Share price reaction for in-flight internet provider Gogo Inc (NASDAQ:GOGO) following news that it has agreed to sell its commercial aviation arm to communications satellite group Intelsat for US$400 million

Story by ProactiveInvestors