MARKET REPORT: Dow Jones tops 40,000 as buyers guess on fee cuts

Wall Street clocked up fresh records last night amid growing hopes of interest rate cuts.

The Dow Jones Industrial Average – one of the world’s leading benchmarks – hit the 40,000 mark for the first time in early trading. It eventually closed at 39,869.38.

The S&P 500 and Nasdaq also hit new highs days after figures showed inflation in the US cooled last month. 

Money markets are betting that America’s central bank could start cutting interest rates as soon as September.

It is thought the Bank of England could move as soon as June.

Record high: The Dow Jones Industrial Average – one of the world’s leading benchmarks – hit the 40,000 mark for the first time

The Dow – home to giants such as consumer goods brand Procter & Gamble and Coca-Cola – has recovered after falling below 18,600 in March 2020.

Dan Coatsworth, analyst at AJ Bell, said: ‘Investors have been pumped up by the inflation reading, believing it is cool enough to stir the Federal Reserve to cut rates. 

Quite a few companies are getting a positive reaction to results, lifting the general mood.’

In London, the FTSE 100 dipped 0.1 per cent, or 7.15 points, to 8438.65 while the FTSE 250 was up 0.2 per cent, or 47.21 points, to 20,822.84.

Pharma giant GSK is to sell its 4.2 per cent stake in Haleon the consumer healthcare firm it spun off.

GSK has sold 810m shares in Haleon since July 2022. GSK fell 0.8 per cent, or 14p, to 1783.5p. Haleon added 0.3 per cent, or 1.1p, to 332.4p. 

Stock Watch – Nexus 

Infrastructure firm Nexus soared after it signed eight deals with housebuilders, including Taylor Wimpey, Vistry and Persimmon, in the six months to the end of March.

It started the second half of its financial year with £72million worth of orders – up from £46million six months ago.

Nexus said housebuilding is set to recover over the next 18 months. Shares rose 24.2 per cent, or 20p, to 102.5p but are down nearly 40 per cent over the past year.

Tech firm Sage spooked investors with its outlook as revenues rose 9 per cent to £1.15billion in the six months to the end of March, saying it expects sales for the year to the end of September to be ‘broadly in line with the first half’. 

It sank 9.4 per cent, or 113p, to 1084.5p.

Convatec, the medical devices firm, lowered its annual growth forecast for its advanced wound care division amid uncertainty over restrictions on products in the US. This prompted a fall of 4.1 per cent, or 10.8p, to 255.4p.

Landlord Grainger posted a £31.2million loss in the six months to March 31, having made a £5.7million profit in the period a year earlier. It fell 2.9 per cent, or 8p, to 264p.

Mr Kipling owner Premier Foods’ annual revenues rose £1.13billion, while profits soared by more than a third to £151.4million. It was up 0.8 per cent, or 1.4p, to 170p.

Uncertainty over Harland and Wolff – the Belfast shipyard that built the Titanic – showed little signs of easing after reports said it faced closure amid a dispute over its future. 

It hit back, saying it had a robust long-term plan – but sank 2.7 per cent, or 0.27p, to 9.75p.

A host of mid-cap companies made huge gains. Magazine publisher Future, behind brands such as Marie Claire and Four Four Two, said revenues rose 3 per cent in the second quarter to March 31.

It pointed at an improved performance in the UK and US, and surged 18.4 per cent, or 160p, to 1030p.

Auction Technology, which operates online marketplaces, said revenues rose 1pc to £68million in the six months to March 31, lifting it 14.6 per cent, or 72p, to 564p.

Housebuilder Vistry – up 0.9 per cent, or 11p, to 1302p – expects higher profits as it aims to build more than 18,000 homes in 2024 – 10 per cent up on the previous 12 months.