London pre-open: Stocks to start lower on US politics, Barcelona attack

Fri 18 Aug 2017

LONDON (SHARECAST) - (ShareCast News) - Stocks are set for a lower open following steep losses overnight on Wall Street that saw the Dow Industrials register its biggest drop in three months and the S&P 500 its largest decline in more than a month.
Fanning the selling, according to traders, were the increased political uncertainty in the US together with the impact of the Barcelona killings the day before that claimed the lives of 13 people and at least 100 injured following an attack by terrorists linked to Daesh.

Five suspected terrorists were shot dead in response.

Against that backdrop, the Footsie was being called to start the session 40 points lower at 7,347, with travel stocks likely to come under selling pressure.

Commenting on the increasingly divisive political backdrop on Capitol Hill, Michael Hewson, chief market analyst at CMC Markets UK said: "With support peeling away from all sides' investors appear to be coming to the conclusion that the US President is likely to find it even more difficult to achieve anything close to what was expected than was the case at the beginning of this year.

"This of course then begs the question as to whether he'll be able to achieve anything at all, at a time when the political cost of continuing to support him rises with each passing day and each tweet storm."

Stoking the selling in US stocks were rumours that Gary Cohn, the chief economic adviser to the White House, might resign.

No significant data releases are scheduled in the UK at the end of the week.

In the States, the University of Michigan's preliminary reading on consumer confidence for the month of August is expected a 1500 BST.

Drug-maker gets green light for cancer treatment from US FDA

AstraZeneca and Merck have been given approval by the US drug administrator to sell their Lynparza ovarian cancer drug in a new tablet form and to a wider range of cancer sufferers. The US Food and Drug Administration granted approval for the drug, which is a PARP inhibitor, meaning it stops the actions of the poly ADP-ribose polymerase protein that helps damaged cells to repair themselves.

Reckitt Benckiser said on Friday it had completed the $4.2bn sale of its food business, including the French's, Frank's RedHot and Cattlemen's brands, to McCormick & Company. RB said it would use the net proceeds to cut debt.
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