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FTSE 100: Stocks surge as billions wiped off Apple following US antitrust suit

LaToya Harding
·Business Reporter, Yahoo Finance UK
Updated
Apple iphones
The Justice Department announced a sweeping antitrust lawsuit against Apple, accusing the tech giant of having an illegal monopoly over smartphones in the US. (ASSOCIATED PRESS)

The FTSE (^FTSE) and Wall Street stocks pushed higher on Thursday while as much as $100bn was wiped off of Apple’s market valuation after the US Department of Justice sued the tech firm.

It claimed it had a “monopoly” on smartphones as it controls about 60% of the US market.

US Attorney General Merrick Garland said: “Unchallenged, Apple’s smartphone monopoly will only grow.”

It came as traders digested the latest decision on UK interest rates from the Bank of England (BoE). Threadneedle Street, as widely expected, held borrowing costs at their record highs of 5.25% despite inflation falling to 3.4% in the year to February.

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Read more: Justice Department files antitrust suit against Apple

It comes as the US Federal Reserve also kept interest rates steady last night, making no changes to its forecast that it will be necessary to cut rates three times in 2024.

  • London’s benchmark index was 2% higher

  • Germany's DAX (^GDAXI) climbed 0.9% and the CAC (^FCHI) in Paris headed 0.2% into the green

  • The pan-European STOXX 600 (^STOXX) was up 0.9% by the end of the day

  • Wall Street also pushed higher across the pond

  • UK government borrowing comes in higher than expected in February

  • Fashion retailer Next reported a 5% rise in annual profit

Follow along for live updates throughout the day:

LIVE COVERAGE IS OVER25 updates
  • Featured
    LaToya Harding

    Justice Department files antitrust suit against Apple

    The Justice Department has filed a federal antitrust lawsuit against Apple (AAPL), alleging that the tech giant illegally maintains its dominance over its iPhone ecosystem by boxing out competing services from other companies.

    Apple said it would fight the lawsuit, which it said "threatens who we are and the principles that set Apple products apart in fiercely competitive markets. If successful, it would hinder our ability to create the kind of technology people expect from Apple."

    A victory for the US in this case "would also set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology," Apple added in its statement.

    Apple's stock was down roughly 3% following news of the lawsuit, which the Justice Department filed with 16 state attorneys general.

  • LaToya Harding

    That's all folks!

    Well that's all we have time for, thanks for following along. Be sure to join us again tomorrow when we will be back for more.

    Catch up on our top stories below:

    Have a good evening all

  • LaToya Harding

    FTSE 100 has best day this year

    Well traders are in a positive mood today, with the FTSE 100 up 2% on the day, its best session this year.

    It is the biggest percentage rise since last September.

  • LaToya Harding

    Three suffers first loss in 13 years

    Slough, UK. 7th February, 2024. A Three mobile phone store in Slough High Street, Berkshire. The Competition and Markets Authority are to investigate the proposed merger between mobile phone companies Vodafone and Three. The CMA are to investigate whether or not the merger, if approved, could mean higher prices or reduced choice for mobile phone consumers and businesses. If the merger does go ahead, it would be the UK’s biggest mobile network with approximately 27 million customers. Credit: Maureen McLean/Alamy Live News

    Three has suffered its first loss in 13 years as the mobile network warned that its £15bn merger with Vodafone was the only way to safeguard continued investment.

    The Telegraph has the following details:

    Three UK swung to a loss of £117m in 2023 amid surging inflation and the growing cost of running its 5G network.

    That compared to a profit of £147m the previous year and marked the first time it has been in the red since 2010.The company slashed its capital expenditure by 40pc last year to £454m as costs jumped by almost a quarter to more than £1bn.

    Three, which has more than 10m customers in the UK, warned it lacked the scale to continue investing in its mobile infrastructure as it renewed its lobbying for a merger with Vodafone.

    The pair have been seeking a deal for months but have faced competition concerns and scrutiny of Three’s ties to China.

    Three reiterated its arguments that the planned merger was needed to secure future investment and challenge BT, which owns EE, and Virgin Media O2.

    A merger of Vodafone and Three would create the UK’s largest mobile network and the pair have vowed to invest £11bn in their combined 5G network over the next decade if the deal goes ahead.

    The competition watchdog has launched an investigation into the tie-up between Vodafone and Three amid concerns that reducing the number of UK mobile networks from four to three will push up prices for consumers.

  • LaToya Harding

    Wall Street hit fresh highs amid rate cut hopes

    Across the pond, Wall Street stocks have extended their rally after the Federal Reserve said it aims to cut interest rates three times this year.

    Major indices added to records set on Wednesday as the American central bank it held interest rates at two decade highs of 5.25% to 5.5%.

  • LaToya Harding

    Number of children living in poverty hits high

    The number of children living in poverty across the UK has hit a record high, with campaigners saying they are being failed and forgotten.

    There were an estimated 4.33 million children in households in relative low income after housing costs in the year to March 2023.

    This is up from 4.22 million the previous year and above the previous high of 4.28 million in the year to March 2020.

    The latest figure is the highest since comparable records for the UK began in 2002/03.

    A household is considered to be in relative poverty if it is below 60% of the median income after housing costs.

    Meghan Meek-O’Connor, senior child poverty policy adviser at Save the Children UK, said:

    “Today 4.3 million children are being failed. It is an outrage that 100,000 more children are in poverty – they are being forgotten.

    “These shocking figures should be an urgent wake-up call to all of us, especially the UK Government. We cannot go on like this. There is no reason children should be going without food, heating, toys, or beds."

  • LaToya Harding

    Bank criticised for leaving rates on hold

    Unite general secretary Sharon Graham says workers need lower borrowing costs:

    “It seems that the Bank of England is flatly refusing to recognise the economic reality on the ground. We won’t see a sustainable recovery until workers and their families have some respite from the high interest rates strangling demand throughout the economy.

    "Workers won’t pay the price for recent years’ sky-high inflation driven by widespread profiteering across the economy.”

    Read more: When will interest rates fall and what should you do?

  • LaToya Harding

    Some Easter eggs at least 50% more expensive

    Easter eggs from brands including Maltesers, Lindt and Cadbury cost at least 50% more than they did a year ago, while others have shrunk in size, a new study has shown.

    The overall price of chocolate has increased by 12.6% in a year – significantly more than the 5.6% rise seen on supermarket food and drink generally – after dry weather in West Africa led to a spike in global cocoa prices, according to the Which? supermarket food and drink inflation tracker.

    In the steepest example of Easter egg inflation, a 286g Maltesers Truffles Luxury Easter Egg increased from £8 to £13 at Waitrose in the month to the end of February compared with the same time a year ago – an increase of 62.5%.

    At Asda, a 50g Lindt Gold Bunny Milk Chocolate five pack increased from an average £2 to £3.11 – up 55.6%.

    At Tesco, a 250g Ferrero Rocher Golden Easter Egg rose in price from £10 on average in the month to the end of February last year to £15 on average in the same period this year – an increase of 50%.

    Which? also found that at Ocado, a 1kg Cadbury Mini Eggs Large Pouch cost £8.86 on average last February but £12.95 this year, up 46.2%.

    At Sainsbury’s, a Kinder Easter with Surprise 36g rose in price from £1.50 on average to £2, or a 33.3% increase.

    Which? did not include loyalty card prices or multibuys in its analysis.

  • LaToya Harding

    Parents to spend £3000 on school holiday entertainment

    Living room, play and video games for boy with smile, fun and joy to relax on floor with technology. Lounge, preteen and kid with happiness in
    Living room, play and video games for boy with smile, fun and joy to relax on floor with technology. Lounge, preteen and kid with happiness in (Yuri Arcurs)

    The latest research from American Express has found that the average UK family will spend £3,045 entertaining children during the school holidays in 2024.

    • Some 43% of parents say they expect to spend more entertaining kids during the holidays than term time, with just 7% spending less.

    • Tech devices such as phones, laptops and tablets are the biggest cost to parents when it comes to keeping children entertained.

    • Parents will spend £401 on tech devices to keep kids busy out of term time – with clubs (the likes of sports, drama, music clubs etc.) coming in second at £366.

    Dave Edwards, vice president at American Express, said:

    “Keeping kids entertained over the school holidays might not always be easy but our data shows it is a focus of many parents’ spending, whether it’s a meal out with the family, a sports club, or a games console.

    We know our cardmembers, many of whom are parents, value entertainment and experiences, and our cards offer that – from access to Amex Experiences, to cashback and tailored offers.”

  • LaToya Harding

    BoE: UK inflation to fall below 2% in Q2

    The Bank of England has cut its inflation forecast, and now believes it will fall below its 2% target this spring.

    CPI inflation is projected to fall to slightly below the 2% target in 2024 Q2, marginally weaker than previously expected owing to the freeze in fuel duty announced in the budget.

    Last month, the Bank forecast that inflation would fall to 2% in the second quarter of this year.

  • LaToya Harding

    UK rate cuts could come soon

    In its minutes. The Bank said on Thursday

    The committee had judged since last autumn that monetary policy needed to be restrictive for an extended period of time until the risk of inflation becoming embedded above the 2% target dissipated.

    The Committee recognised that the stance of monetary policy could remain restrictive even if Bank Rate were to be reduced, given that it was starting from an already restrictive level.

  • LaToya Harding

    Bailey on interest rates

    Justin Tallis, PA Images

    Bank of England governor Andrew Bailey said:

    In recent weeks we’ve seen further encouraging signs that inflation is coming down.

    We’ve held rates again today at 5.25% because we need to be sure that inflation will fall back to our 2% target and stay there.

    We’re not yet at the point where we can cut interest rates, but things are moving in the right direction.

  • LaToya Harding

    Policymakers split 8-1 in rate decision

    For the first time since September 2021, no member of the Bank of England’s monetary policy committee voted for an interest rate hike.

    Swati Dhingra voted to reduce Bank Rate by 0.25 percentage points, to 5%, maintaining her dovish stance.

    The other eight – Andrew Bailey, Sarah Breeden, Ben Broadbent, Megan Greene, Jonathan Haskel, Catherine L Mann, Huw Pill, and Dave Ramsden – all voted to leave rates at 5.25%.

    Mann and Haskel had previously voted to raise rates to 5.5% at last month’s meeting.

  • LaToya Harding

    BREAKING: BoE holds interest rates

    The Bank of England has left interest rates unchanged at a 16-year high of 5.25% for the fifth time in a row.

    The BoE has been trying to bring down inflation to its 2% target without harming the economy but high interest rates have raised borrowing costs for mortgage holders who are paying more each month to the bank.

    Inflation slowed to 3.4% in February, down from January’s 4%, the lowest since September 2021, according to figures from the Office for National Statistics (ONS).

    Market analysts argue that with consistent falls in the growth rate of inflation, the Monetary Policy Committee is running out of reasons not to cut rates.

    Read more here

  • LaToya Harding

    Next beats forecasts with a 5% rise in pre-tax profits

    Shares at Next (NXT.L) jumped as much as 5% in London, touching a record high, after it beat forecasts with a 5% rise in pre-tax profits last year.

    The fashion and homewares retailer saw pre-tax profits hit a record £918m ($1,172m) in the year to the end of January, which was £3m higher than its previous guidance. It predicted profits would now come in at £960m in 2024.

    Meanwhile, sales at the high street bellwether increased 5.9% to £5.8bn.

    Lord Wolfson, chief executive, said: “It has been a long time since we started a year in a more positive frame of mind. On the face of it, the consumer environment looks more benign than it has for a number of years, albeit there are some significant uncertainties.”

    He added: "It feels like we are now entering a new era."

    Next bought majority stakes in brands including Fatface, Cath Kidston and Reiss during the year, and is looking for opportunities to invest in more brands

    It also plans to expand in the US, Middle East and Asia via new partnerships including a tie-up with US department store Nordstrom and new franchise and licensing deals in India.

    See what other tickers are trending here

  • LaToya Harding

    UK private sector expands for fifth consecutive month

    Britain’s private sector expanded for a fifth month in a row in a further sign that the economy is moving out of recession.

    According to S&P Global's UK PMI, the reading for March came in at 52.9, down from 53 in February but above the 50 mark which separates contraction from growth.

    Service sector growth was quicker than that seen in the manufacturing sector but it lost some momentum in the month, coming in at a three-month low of 53.4.

    Meanwhile, manufacturing production increased for the first time since February last year.

    Chris Williamson, chief business economist at S&P Global, said:

    Further signs of the UK economy having pulled out of last year’s brief recession are provided by the provisional PMI data for March.

    A further robust expansion of business activity ended the economy’s best quarter since the second quarter of last year.

    The survey data are indicative of first quarter GDP rising 0.25% to thereby signal a reassuringly solid rebound from the technical recession seen in the second half of 2023.

  • LaToya Harding

    Record number of young people on zero-hour contracts

    The number of young workers on zero-hour contracts has reached a new record, it has been revealed.

    According to analysis by the Work Foundation, some 136,000 more workers were given zero-hour contracts in 2023 compared to 2022, with two thirds of those being 16–24 year olds.

    The Work Foundation said only a minority of zero-hour workers have regular pay and access to rights.

    Its data suggested three in four of the 1.1 million people on zero-hour contracts are in “severely insecure work”.

    Alice Martin, head of research at the Work Foundation at Lancaster University, said:

    “Zero-hour contracts have previously been hailed the answer to flexible work, but our research shows too often it is only employers that have choices, workers do not.

    “The data shows these contracts affect certain workers more than others, and it is young workers – particularly young women – who are bearing the brunt of policy-makers inaction.

    “After a decade of indecision over zero-hour contracts, the UK has fallen behind and now our younger generation are paying the price.

    “Other nations have already either banned zero-hour contracts or heavily regulated their use, so we need to catch up and find a better balance between workplace security and flexibility.”

    The research also indicated that black workers are 2.7 times more likely than white workers to be on zero-hour contracts and workers from multiple/mixed backgrounds are 2.3 times more likely than white workers to be on zero-hour contracts.

  • LaToya Harding

    Norway leaves rates on hold

    Following the Swiss interest rate decision, Norway has left their interest rates on hold at 4.5%

    On the back of the move, governor Ida Wolden Bache said:

    “The policy rate will likely need to be maintained at the current level for some time ahead in order to bring inflation back to the 2% target within a reasonable time horizon."

  • LaToya Harding

    Swiss National Bank cuts interest rates

    Switzerland’s central bank has surprisingly lowered its policy rate by 0.25 percentage points to 1.5% from 1.75% as inflation in the country fell to just 1.2% in February.

    The move means the Swiss National Bank (SNB) is the first major central bank to cut interest rates in the current cycle.

    Financial markets were expecting it to hold rates today.

    SNB said that “the fight against inflation over the past two and a half years has been effective”.

    "For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability. According to the new forecast, inflation is also likely to remain in this range over the next few years.

    "With its decision, the SNB is taking into account the reduced inflationary pressure as well as the appreciation of the Swiss franc in real terms over the past year. The policy rate cut also supports economic activity. Today’s easing thus ensures that monetary conditions remain appropriate."

    Watch: SNB Cuts Key Interest Rate to 1.5% to Contain Franc

  • LaToya Harding

    Nationwide accepts terms of Virgin Money takeover

    Nationwide Building Society has agreed terms to take over rival Virgin Money, paying 220p per share, including a planned 2p-per-share dividend payout.

    This is a 38%% premium to Virgin Money’s share price on 6 March, and values it at £2.9bn.

    The move will now create a combined group with £366bn in total assets, almost 700 branches and more than 23 million customers.

    It also solidifies Nationwide’s position as the second-largest mortgage lender after Lloyds Banking Group.

    Bosses at Virgin Money, the UK’s sixth-largest retail bank, could share £6m from the deal.

    Nationwide said:

    “Nationwide’s board agreed that a binding offer to acquire Virgin Money was in the best interests of the society and its present and future members, following full consideration and the appropriate due diligence, and after taking comments from members into account.”

  • LaToya Harding

    Bitcoin price rebounds back above $67,000

    Bitcoin has rebounded back above the $67,000 (£524,900) mark in early morning trading UK time. This uptick follows the decision by the US Federal Reserve to maintain interest rates at their current levels, as announced in a Federal Open Market Committee (FOMC) statement on Wednesday.

    As anticipated by interest rate traders, the FOMC decided to keep the benchmark federal funds rate within the range of 5.25% to 5.50%.

    In Wednesday's statement, the Federal Reserve chair Jerome Powell said the US central bank expects to make rate cuts "at some point this year." He stressed that inflation has eased substantially but is still too high, and the Fed will need to adjust their monetary policy approach meeting by meeting as it monitors inflation.

    Following the FOMC meeting, bitcoin (BTC-USD) increased by over 7% in the past 24 hours, reaching a daily high of $67,700. The uptick comes after bitcoin experience a downturn in early trading on Wednesday, reaching a low of around $61,500.

    The world's largest digital asset by market cap is still down from reaching an all-time high above the $73,000 mark one week ago.

    Read the full article here

  • LaToya Harding

    Bank of England expected to keep rates at 5.25%

    The Bank of England (BoE) is expected to hold UK interest rates steady at noon today.

    According to the money markets, ‘no change’ is a 95% chance, while there’s just a 5% possibility of a quarter-point cut to 5%.

    However it is still likely we will see a split in the vote from monetary policy committee members. At last month’s meeting, the nine policymakers split three ways – six voted to hold rate, two for a rise, and one opting for a cut.

    George Buckley, economist at Nomura, said:

    Annual rates of inflation are likely to fall further over the course of 2024, and pay settlements are running at a slower pace according to XpertHR data.

    But calculations of price “momentum” suggest we’re not quite at the settling point we need to be for the annual rate of inflation to migrate all the way back to its target.

    The stronger services [inflation] print in particular provides some comfort for our view that the Bank will only cut rates from August this year, while weaker pay settlements raise the risk of an earlier move relative to our forecast.

  • LaToya Harding

    UK government borrowing higher than expected

    UK government borrowing came in higher than expected in February, figures from the Office for National Statistics (ONS) have shown.

    Borrowing was £8.4bn after higher benefits payments such as cost-of-living support, with economists forecasting a figure of £5.95bn for the month.

    However, February's borrowing was still £3.4bn lower than the previous year, when the deficit reached £11.8bn, as the growth in tax receipts exceeded growth in spending.

    It was also the fourth consecutive month where borrowing was down on the previous year.

    The Treasury has borrowed £106.8bn so far this financial year, which was £4.6bn less than in the same eleven-month period a year ago, and the lowest for four years in nominal terms.

    Jessica Barnaby, senior ONS statistician, said: “Relative to the size of our economy, debt remains at levels last seen in the early 1960s.”

  • LaToya Harding

    Asia and US stocks

    Stocks in Asia were were mostly higher overnight after US stocks rallied to record higher following the Federal Reserve’s indication that it expects to deliver interest rate cuts later this year.

    The Nikkei (^N225) rose over 2% on the day in Tokyo, after Japan’s government reported exports grew nearly 8% in February from a year earlier, in the third straight month of increase.

    Shipments of cars and electrical machinery increased, helping to reduce the trade deficit to around half of what it was a year earlier.

    Meanwhile the Hang Seng (^HSI) climbed 1.9% in Hong Kong but the Shanghai Composite (000001.SS) was around 0.1% down by the end of the session as the Chinese government announced fresh measures to support the economy.

    Across the pond, US stocks rallied to records on Wednesday, with the S&P 500 (^GSPC) jumping 0.9%, to 5,224.62, setting an all-time high for a second straight day.

    The Dow Jones Industrial Average (^DJI) jumped 1%, to 39,512.13, and the tech-heavy Nasdaq Composite index (^IXIC) ended 1.3% higher at 16,369.41.

  • LaToya Harding

    Coming up...

    Good morning, and welcome back to our live markets blog. Here we cover all things happening across the global economy and take a deep dive into what's moving markets.

    Let's have a quick look at what's on the agenda for today (it's going to be a busy one!):

    • 7am: UK public finances

    • 7am: Trading updates: Next, Direct Line

    • 8am: Taiwan’s interest rate decision

    • 8.30am: Switzerland’s interest rate decision

    • 9am: Norway’s interest rate decision

    • 9am: Eurozone flash PMI survey of business activity for March

    • 9.30am: UK flash PMI survey of business activity for March

    • 12pm: Bank of England interest rate decision

    • 12.30pm: US weekly jobless figures

Watch: How does inflation affect interest rates?

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