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Wall Street jumps as FTSE 100 closes near new record high

FTSE  Traders work on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 27, 2023. REUTERS/Andrew Kelly
Traders across Wall Street and the FTSE 100 are optimistic amid positive jobs data and good earnings. Photo: Andrew Kelly/Reuters (Andrew Kelly / reuters)

The FTSE 100 and European stocks closed higher as a slew of upbeat earnings from blue-chip companies kept the UK index pinned near record levels.

The FTSE 100 (^FTSE) rose 0.41% to close at 7,917 points, while the CAC 40 (^FCHI) in Paris jumped 1% to 7,191 points. In Germany, the DAX (^GDAXI) climbed 0.76% to 15,527.

Across the pond, stocks were also higher as a raft of strong quarterly earnings and data showing a rise in weekly jobless claims outweighed concerns about the Federal Reserve's rate-hike path

The Dow Jones (^DJI) rose 0.26% to 34,036 points. The S&P 500 (^GSPC) climbed 0.19% to 4,125 points and the tech-heavy NASDAQ (^IXIC) gained 0.22% to 11,936.

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Applications for unemployment benefit in the US rose for the first time in six weeks in the week to Feb 4, showing the tight labour market is beginning to loosen and potentially a sign the US Federal Reserve could ease its pace of interest rate rises.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "The level of claims remains very low but the numbers are striking; unadjusted claims underperformed, relative to the three most recent years when Feb 4 fell on a Saturday, by the most since early November. A single observation proves nothing, but it is striking that this reading comes in the first colder-than-usual week since the polar vortex swept across the country in the week before Christmas."

He added: "The strength of January payrolls was due to lower layoffs than usual for the month, and these data support, at the margin, our view that the relatively mild winter weather was a big part of the story. Our take on the seasonals suggests that claims will be little changed over the next couple weeks, so further increases in claims would get our attention. The bigger picture here, though, is that the surge in layoff announcements reported in the Challenger survey will pass through into claims by late winter/early spring, allowing for the usual lags."

Back in London, Asia-Pacific focused bank Standard Chartered (STAN.L) was the top riser, jumping over 11% this Thursday amid takeover rumours from First Abu Dhabi Bank (FAB).

Unilever (ULVR.L) rose 0.24% after the consumer goods giant reported quarterly underlying sales growth above expectations, helped by higher prices for its detergents, soaps and packaged food.

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Unilever’s final results for 2022 shows that prices jumped by 11.3% over the last year. Sales volumes fell by 2.1%, as customers sought out cheaper alternatives, but that still gave the company underlying sales growth of 9%.

AstraZeneca (AZN.L) jumped 3.98% after the pharma company beat expectations with fourth-quarter profits after double-digit annual sales growth in 2022.

Entain (ENT.L) plunged 13.34%, after a Jefferies report pointed to MGM's chief executive officer saying the company had "moved on" from the gambling firm amid speculation of a takeover.

At the current rate, we could see the FTSE 100 break through the 8,000 level by early next week, according to Russ Mould, investment director at AJ Bell. The index set a new intra-day high of 7,947.94 during the morning session.

“Reports suggest First Abu Dhabi Bank is still interested in buying Standard Chartered, despite guidance to the contrary last month," Mould said.

“If successful, it would represent yet another UK stock acquired by a foreign player. It would also play to the theory that industry players are more likely to buy UK-listed companies than private equity in the current environment.

“Whereas the sharp rise in the cost of debt has made life harder for private equity to do leveraged deals, a lot of businesses have come out of the pandemic in a robust financial shape and have plenty of cash on their books to buy rivals in their respective sectors.”

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Meanwhile, Brent crude (BZ=F) slipped and was trading at around $83/barrel, as optimism over recovering Chinese demand was offset by concerns of weakening activity in the United States.

In Asia, Tokyo’s Nikkei 225 (^N225) finished flat at 27,584 points, while the Hang Seng (^HSI) in Hong Kong gained 1.47% to 21,597. The Shanghai Composite (000001.SS) also edged higher, rising 1.18% to 3,270 points.

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