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Wall Street down ahead of key debt-ceiling talks as FTSE finishes in the red

A look at how the major markets are performing on Tuesday

FTSE  , New York, USA. 10th May, 2023. U.S. President JOE BIDEN speaks on the debt limit during an event at SUNY Westchester Community College in Valhalla, New York. U.S. President Joe Biden on Wednesday blasted Republican-demanded spending cuts as ''devastating, '' making his case in a campaign-style speech to voters as lawmakers met in Washington on raising the government's borrowing limit to avoid a potentially catastrophic U.S. (Credit Image: © Ron Adar/SOPA Images via ZUMA Press Wire) EDITORIAL USAGE ONLY! Not for Commercial USAGE!
FTSE and Wall Street struggle for direction as US president Joe Biden is set to meet with Republican speaker Kevin McCarthy. Photo: PA/Alamy (ZUMA Press, ZUMA Press Inc)

The FTSE 100 and European stocks extended losses this Tuesday as US stocks fell back at the open ahead of a key meeting of congressional leaders and president Joe Biden on the country’s debt ceiling.

The FTSE 100 (^FTSE) lost 0.38% to close at 7,746 points, while the CAC 40 (^FCHI) in Paris slipped 0.18% to 7,404 points. In Germany, the DAX (^GDAXI) tumbled 0.12% to 15,897.


The FTSE 100 finished in the red after securing modest gains following jobless data for the UK that showed a surprise tick higher, with weakness in the sterling supporting some internationally-focused consumer firms

Telecoms giant Vodafone (VOD.L) said it was cutting 11,000 jobs and expected to post flat earnings next year after reporting a decline in annual profits in a performance described as “not good enough” by its chief executive.


CEO Margherita Della Valle said: “Our performance has not been good enough. To consistently deliver, Vodafone must change.”

Turnaround plans have failed to impress the market so far with shares marked down around 6%.

Winston and Gauloises cigarettes maker Imperial Brands (IMB.L) expects profits to rise after it increased prices.

Read more: Vodafone to cut 11,000 jobs as new boss says ‘performance not good enough’

The tobacco company said it is on track to deliver faster earnings growth in the second half of year, even after a fall in volumes as consumers returned to pre-Covid buying patterns and its exit from Russia.

In the AIM market (^FTAI), shares in Boohoo (BOO.L) jumped by 6.35% as the online fashion retailer said profits should start to improve this year.

The British fast-fashion chain expects adjusted earnings margins of 4% to 4.5%, which would beat the 3.6% achieved last year amid cost cuts and a focus on more sustainable growth.

US and Asia

US stock markets were mostly lower on Tuesday as investors digested fresh economic data and focused on negotiations over the debt-ceiling stalemate, with talks set to resume later in the day.

The Dow Jones (^DJI) lost 0.61% to 33,145 points. The S&P 500 (^GSPC) tumbled 0.24% to 4,126 points and the tech-heavy NASDAQ (^IXIC) gained 0.21% to 12,351.

Wall Street is watching for signs of movement in the debt-ceiling impasse, with a meeting between Biden and house speaker Kevin McCarthy set for Tuesday afternoon in Washington.

The meeting comes after treasury secretary Janet Yellen sounded the alarm once again on Monday. She wrote in a letter to lawmakers that "it would cause severe hardship to American families", with the US potentially defaulting as soon as 1 June.

The US president tweeted about the risk of a US debt default ahead of his meeting with Republican speaker McCarthy.

In Asia, markets finished mixed as investors digest key economic releases from China that missed estimates despite market expectations of a further rebound growth.

Tokyo’s Nikkei 225 (^N225) gained 0.73% to 29,842 points, while the Hang Seng (^HSI) in Hong Kong lost 0.21% to 19,928. The Shanghai Composite (000001.SS) slipped 0.60% to 3,290 points.

China’s retail sales jumped 18.4%, industrial production rose 5.6% and fixed asset investment gained 5.2% — all below forecasts by economists surveyed by Reuters.


The pound (GBPUSD=X) slipped after data showed UK unemployment unexpectedly rose in the first quarter, fuelling hopes of a pause in the Bank of England's rate hike cycle, with sterling trading at $1.2497.

Hedge funds are starting to doubt the pound’s rally will last much longer after a surprising run that’s made it the best-performing major currency in the developed world this year, Bloomberg reported.

Sterling (GBPEUR=X) also lost ground against the euro to trade at €1.1482.

Oil markets

Meanwhile, Brent crude (BZ=F) lost ground and trading at around $74 per barrel as recession fears keep pressuring the market.

"The OPEC+ cuts are likely to have a greater impact as we move through the summer, as previous attempts to balance the markets were offset by seasonal weakness and the release of strategic reserves," said Third Bridge analyst Peter McNally.

Watch: Markets in 3 Minutes: China data disappointment in perspective

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