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US stocks rise on jobs data while FTSE finishes lower

FTSE  A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., February 17, 2023.  REUTERS/Brendan McDermid
Wall Street and the FTSE 100 moved in different directions this Thursday. Photo: Brendan McDermid/Reuters (Brendan McDermid / reuters)

The FTSE 100 and European stocks were mixed this Thursday amid expectations that interest rates in the US will stay higher for longer.

The FTSE 100 (^FTSE) lost 0.60% to close at 7,882 points, while the CAC 40 (^FCHI) in Paris finished near the flatline at 7,321 points. In Germany, the DAX (^GDAXI) was also muted, finishing at 15,637.

Across the pond, US stocks were higher following labour market data that was weaker than expected and ahead of Friday morning's key February jobs report.

The Dow Jones (^DJI) rose 0.22% to 32,869 points. The S&P 500 (^GSPC) gained 0.19% to 3,999 points and the tech-heavy NASDAQ (^IXIC) advanced 0.33% to 11,613.

The weekly report on initial filings for unemployment insurance Thursday morning showed 211,000 claims were filed last week, an increase of 21,000 from the prior weak and what economists called the "first hint of weakness" in this data.

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Markets also heard from Federal Reserve Chair Jerome Powell before the House Financial Services Committee Wednesday. Powell continued to stress that "no decision" has been made on the size of the Fed's upcoming interest-rate increase at its March policy meeting.

Read more: Bank of England policymaker calls for holding interest rates

"When say we will look at the totality of data, that will include these next reports. We will carefully analyze. Haven't made a decision on the March meeting. Larger point is that we are not on a preset path," said Powell during his second day of testimony before Congress.

Ipek Ozkardeskaya at Swissquote Bank noted the “second day of testimony was as hawkish as the first one, with one little exception.”

“Powell added a very small tweak to his Tuesday language, and said that the data will determine whether the Fed would increase the pace of the interest rate hikes, BUT that ‘no decision has been made on this’ yet.”

“If Powell’s intention was to cool down the 50bp hike bets yesterday, it didn’t go according to the plan. That probability went above 80% yesterday, as both the ADP report and the JOLTS data came in hotter-than-expected.”

Back in London, Insurer Aviva's (AV.L) shares gained 2.59% after it notched up a 35% surge in annual earnings despite pressure on its UK general insurance arm amid soaring costs and a hit from severe weather claims.

Packaging firm DS Smith (SMDS.L) saw its shares tumble 4.61% after it warned that customers have been reducing stock levels.

Rio Tinto (RIO.L) was the biggest drag in the FTSE 100, plunging over 4% as the miner traded without dividend eligibility.

Across the wider FTSE 250 (^FTMC) index, WANdisco has suspended trading on the stock market after finding evidence of "potentially fraudulent irregularities" in its books.

It comes days after the data company announced plans to seek a stock market listing in New York.

Read more: Arm chooses New York for key technology listing in 'kick in the teeth' for London

Meanwhile, Brent crude (BZ=F) bounced back and was trading at around $83/barrel.

In Asia, Tokyo’s Nikkei 225 (^N225) gained 0.63% to 28,623 points, while the Hang Seng (^HSI) in Hong Kong lost 0.58% to 19,935. The Shanghai Composite (000001.SS) also lost ground, slipping 0.22% to 3,276 points.

Watch: Fed’s Powell reiterates interest rate, debt ceiling pathways to Congress

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