Stocks started the trading day in the red, as Asian markets sold off overnight on fears that the Federal Reserve might cut back on its quantitative easing (QE) programme. The problem with stimulus packages is that dealers become accustomed to constant support, so any hint of fear that this will come to an end can lead to a sharp sell-off. Concern that the Federal Reserve will reduce the size of its QE scheme got equities off on the wrong foot today, but better-than-expected economic and corporate results helped stocks pull back some of their losses.
BT announced a pre-tax profit of £449 million for the three months to June, which topped analysts’ expectations. The firm signed up over 500,000 new customers to its sports package ahead of the football season.
In the US, the Dow is down 40 points at 15,502 as the poor sentiment from the UK seeps across the Atlantic. The latest economic data from the US was mixed: the number of durable goods orders rose by 4.2% in June, while analysts were only expecting an increase of 1.1%, but the number of people claiming unemployment benefit increased by 7000.