Yahoo Finance What to watch: Biden's $2tn infrastructure plan lifts markets, Next hikes profit guidance, Deliveroo continues to fall
Here are some of the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.
Biden's $2tn infrastructure plan lifts markets
Stock markets received a boost on Thursday after US president Joe Biden announced a $2.3tn (£1.6tn) infrastructure spending plan on Wednesday night.
This was on top of the $900bn that came at the beginning of the year.
The FTSE 100 (^FTSE) jumped 0.61% by mid-morning, while the CAC (^FCHI) advanced 0.44% and the DAX (^GDAXI) was 0.54% higher despite fears of a third wave of COVID infections across the bloc and new restrictions in France.
On Wednesday the S&P 500 (^GSPC) fell short of an all-time high and at one point hitting its highest ever intraday level of 3994, just shy of breaching the 4,000 mark for the first time.
It came as Biden said his new spending package was a "once in a generation investment in America unlike anything we’ve done since we built the interstate highway system and the space race decades ago."
"This is not a plan that tinkers around the edges," he said in his speech in Pittsburgh, Pennsylvania, where he launched his campaign two years ago.
The proposal, dubbed the American Jobs Plan, would direct billions to initiatives such as charging stations for electric vehicles, eliminating lead water pipes and tackling climate change, as well as modernising some 20,000 miles of roads and repairing crumbling bridges.
Subject to approval by Congress, the spending would be rolled out over eight years.
WATCH: Biden sets out 'once-in-a-generation' $2tn infrastructure plan
"There was some concern over how it would be funded, including a corporate tax hike to 28% [from 21%], and other tax raising measures, however for now markets appear fairly sanguine about these," Michael Hewson of CMC Markets said.
The funding plan would roll back parts of Donald Trump’s tax-cut law, which lowered the corporate tax rate from 35% to 21%.
“It’s big, yes. It’s bold, yes. But we can get it done,” Biden said. "I don't think you'll find a Republican today in the House or Senate...who doesn't think we have to improve our infrastructure. There’s no reason why it can’t be bipartisan again.”
He added: "The divisions of the moment shouldn't stop us from doing the right thing for the future. We're gonna bring Republicans into the Oval Office, listen to them, what they have to say, and be open to their ideas. We’ll have good faith negotiations with any Republican who wants to help get this done."
Next hikes profit guidance
Next’s (NXT.L) profit nearly halved in 2020 compared to the year before with its stores closed for a big chunk of the year amid a series of lockdowns.
But the group said it expects profits to recover to pre-pandemic levels during the current year if there are no further restrictions, raising its profit guidance.
The news sent the company's shares up as much as 4% on Thursday.
"Next share price has been one of the retail outperformers over the last 12 months, despite being exposed to one of the worst retail environments in modern times," said Michael Hewson, chief market analyst at CMC Markets UK.
"At the end of last year, the shares managed to push above their pre-pandemic peaks of 2020, and also post new record highs at the end of January, in a narrative completely counter to the wider retail environment," he added.
The company's profit before tax was £342m ($471m), down from £729m year-on-year. Net debt reduced to £610m, from £1.1bn in the previous year.
Deliveroo continues to fall
Shares in Deliveroo (ROO.L) continued to fall on Thursday after its dire stock market debut in London.
On Wednesday the loss-making food delivery company, which is backed by Amazon (AMZN), suffered one of the worst debuts on record, with shares falling 30% in the first half hour of trading, wiping more than £2bn ($2.7bn) off the company’s value.
The stock slumped a further 1.9% to 280p after opening on its second day. Deliveroo's 390p offer price had valued the business at £7.6bn.
READ MORE: Deliveroo IPO stock flop raises questions for Goldman and JP Morgan
Tens of thousands of retail investors who invested in the firm through a platform called PrimaryBid are now facing heavy paper losses on the back of the fall. Around 70,000 individuals put £50m into the company.
Wednesday marked the start of conditional dealing for Deliveroo shares, which means only institutional investors can buy and sell the stock. Retail investors must wait until the start of unconditional dealing next Wednesday to make any adjustments.
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