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LONDON (Alliance News) - US stocks are expected to open higher Wednesday as US President Barack Obama prepares to officially nominate Janet Yellen as the new chair of the Federal Reserve, although stocks in London remain slightly lower amid the ongoing US political standoff.
After an equity sell-off on Monday and Tuesday, the US budget impasse appears to have been placed on the back-burner ahead of the New York bell Wednesday. US Investors have been lifted by White House confirmation that Obama will nominate Yellen to become the first female chair of the Fed. Yellen's monetary policy is widely regarded to be dovish, and traders think the Fed may delay the start of reducing its quantitative easing stimulus programme, ensuring cheap money is around for longer.
US stock futures are pointing to a higher open on Wall Street. The DJIA is expected to open 0.2% higher, with the S&P up 0.3%, and the Nasdaq up 0.4%.
Similar sentiment is not shared in the UK however. The FTSE 100 is down 0.2% at 6,355.46, the FTSE 250 is down 0.2% at 14,638.25, and the AIM All-Share is down 0.2% at 775.15.
Weak UK production figures were released earlier in the day, hitting stocks and the pound. UK industrial production declined unexpectedly in August and at the fastest pace since September 2012. Data from the Office for National Statistics showed a decline of 1.1% in August from July, way below the expected growth of 0.4%.
The equivalent data from Germany showed the country's industrial production increased at a faster-than-expected pace in August, recovering from the previous month's contraction. Monthly output in Europe's biggest economy grew by 1.4%.
At the individual stock level, house builders continue to be big gainers after the FTSE 350 household goods index constituents all benefited from ratings and/or price target changes from Goldman Sachs. The sector index is currently up 1.4%. Persimmon, up 6.2% is the biggest blue-chip riser, while Bellway, up 4.5%, Barratt Developments, up 4%, and Taylor Wimpey, up 4%, are the three biggest gainers on the FTSE 250.
Later in the day, ECB President Draghi is expected to give a speech at 2300 BST.
By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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