News flow was working against the FTSE on Thursday as the house builders and Sainsbury (LON:SBRY) dragged the index lower. A warning on margins from Taylor Wimpey (LON:TW) and news that the Sainsbury- Asda merger was off saw the FTSE fall sharply on the open.
Any attempt to edge higher across the session proved futile, particularly after the Dow opened 150 points in the red, dragging on investor sentiment across the afternoon.
Dow tumbles on 3M earnings
Whilst the S&P and the Nasdaq touched record highs earlier in the week, the Dow is not playing ball. The Dow slumped over 150 points on the open as shares in 3M (NYSE:MMM) dive 10% after the company reported earnings that were much lower than forecast. The company slashed its full year outlook and announced plans to cut 2000 jobs worldwide.
The S&P and the Nasdaq both opened in positive territory, with the Nasdaq reaching another record high. Tech stocks were heavily in demand following impressive numbers from Facebook (NASDAQ:FB) and Microsoft (NASDAQ:MSFT) overnight.
We are approach the half way mark for earnings and overall the news has been good enough to keep the bulls in charge. The bar was set low coming into this earnings season and it has been surpassed. Granted 3M is a troubling result, but overall these have been few and far between.
US data supports the dollar rally
The dollar continued to dominate across the board on Thursday following better than expected durable goods data. Durable goods shot up 2.7% in March well ahead of the 0.8% forecast. The strong reading comes following impressive home sales data and retail sales data over the pat week. The stats are showing that the US economy is holding up well compared to other economies.
Investors as good as ignored a sudden surge in jobless claims. The number of people claiming unemployment benefits jumped to a 19-month high. Despite this, the labour market remains tight which is why investors were happy to shrug off the numbers.
Euro picks up from June 2017 low
The euro dropped to its lowest level since June 2017 on dollar strength, as the data from the US highlights the growing difference in the health of the two economies. This week's eurozone consumer confidence declined by more than anticipated and the German IFO business climate indicator dropped for the seventh month in eight, highlighting the gloomier outlook for the bloc.
The euro dipped to a low of $1.1119 and has since rebounded back towards $1.1150.
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