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Wall Street lower ahead of Powell speech as FTSE holds gains

The Federal Reserve chair Jerome Powell
The Federal Reserve chair Jerome Powell's remarks later today are expected to hint at how how long the US central bank will keep interest rates high. Photo: Yuri Gripas/Abaca Press/TNS/Alamy Live News (McClatchy-Tribune, Tribune Content Agency LLC)

The FTSE 100 and European stocks were mixed this Tuesday following the record-breaking profits announced by BP (BP.L).

The FTSE 100 (^FTSE) rose 0.20% to 7,852 points during afternoon trading, while the CAC 40 (^FCHI) retreated 0.31% to 7,114 points. In Germany, the DAX (^GDAXI) fell 0.46% to 15,275.

Across the pond, stocks opened mostly lower as investors await Federal Reserve Chair Jerome Powell's remarks for further clues on how long the US central bank will keep interest rates higher.

The Dow Jones (^DJI) lost 0.36% to 33,769 points. The S&P 500 (^GSPC) fell 0.17% to 4,104 points and the tech-heavy NASDAQ (^IXIC) advanced 0.14% to 11,904.

A speech from Powell at the Economic Club of Washington scheduled for Tuesday afternoon remains top of mind for investors. Market view the appearance as an opportunity for Powell to offer more clarity on where rates are headed, or clarify some comments made after last week’s 25 basis point rate hike.


“Investors will parse Powell’s comments for his read on the red hot jobs data in the US Friday,” said Patrick Munnelly, market analyst at TickMill Group.

“These come in light of last week’s post-rate announcement press conference when markets believed the Fed Chair gave the first clear acknowledgement of the start of the disinflationary process in play,” he added.

Craig Erlam, senior market analyst UK & EMEA at OANDA, said: "Investors seem a little lost this week, disheartened by the jobs report in particular but also poor tech earnings and a still hawkish Federal Reserve. The central bank may have softened its tone a little but once you take the economic data into consideration, the case for a couple more 25-basis point hikes is clearly there.

"That's come as quite a setback following what has been a much more optimistic start to the year, in which interest rate expectations have been broadly pared back. But as was always likely to be the case, and will likely remain so this quarter at least, the data is going to be inconsistent and sentiment is going to reflect that."

Bed Bath & Beyond (BBBY) shares plunged a record 41% at the opening bell in the US after the ailing home goods store said it was planning to raise some $1bn (£830m) through an offering of preferred stock and warrants in a last-ditch effort to stave off bankruptcy.

Back in London, shares in BP have jumped to their highest level in over two months, after it reported profits doubled last year and lifted its dividend by 10%.

Read more: FTSE 100: BP profits hit £23bn as energy crisis brings bumper gains

BP shares are up 5.75% at 505p, making it the top riser on the FTSE 100 index of blue-chip shares.

“BP may be enemy number one in the public’s eyes for its record profits, but its latest success has helped to drive up the FTSE 100, which in turn will benefit people up and down the country with exposure to UK stocks in their pension,” said Russ Mould, investment director at AJ Bell.

“The UK blue chip index advanced 0.5% to 7,873 with energy companies the key driver, alongside a good showing from banks and pharmaceuticals."

Shell (SHEL.L) was the second biggest riser, up by 2.13%, followed by GSK (GSK.L), up by 1.98%.

Airtel (AAF.L) and Barclays (BARC.L), up by 1.87% and 1.57% respectively, round up the top five earners.

Read more: Interest rates will rise again despite positive economic signs, says rate-setter

Meanwhile, Brent crude (BZ=F) jumped by 0.85% and was trading at around $82/barrel amid signs that China’s economic recovery is boosting crude demand.

In Asia, Tokyo’s Nikkei 225 (^N225) finished flat at 27,685 points, while the Hang Seng (^HSI) in Hong Kong gained 0.43% to 21,313. The Shanghai Composite (000001.SS) also edged higher, rising 0.29% to 3,248 points.

Watch: Wall Street's 'new cyclical bull market' has started

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