Newspaper article The Evening Standard (London, England)

Traders Are Slow to Digest Retailers' Christmas News

Newspaper article The Evening Standard (London, England)

Traders Are Slow to Digest Retailers' Christmas News

Article excerpt

Byline: MICKEY CLARK

SHARES traded within a narrow band as stock market investors began disseminating the first of the Christmas trading updates from struggling retailers.

The FTSE 100 index fell seven points to 4572.6 ahead of Thursday's expected cut in interest rates by the Bank of England. In the meantime, investors have plenty to chew over. Presidentelect Barack Obama is planning a massive tax stimulus in an attempt to revive the ailing US economy and the growing number of job losses in this country continues to give cause for concern.

Trading updates from Next, 69p higher at 1160p, and Debenhams, up 8'p at 37p, were judged to be in line with expectations.

Tomorrow it's the turn of Marks & Spencer, up 6-p at 236-p, which Shore Capital says is likely to make gloomy reading. It reckons M& S has had a gloomy Christmas and could report a 10% decline in like-for-like sales of general merchandise with food sales down 7%.

It continues to rate the shares a hold and expects them to outperform with the help of some sector rotation by investors. But Pali International has repeated its sell rating and warns it will be "par for the course" if Christmas sales turn out to be as bad as feared

even if the stores group succeeds in limiting bottom-line damage.

J Sainsbury fell 4'p to 3173/4p. It kicks off the Christmas trading update for the UK's big three grocers on Thursday.

Comments from the likes of Waitrose and Asda suggest that Christmas trading was respectable, thanks to a late rush. Falling petrol prices may not dent profits, but will severely depress reported sales growth.

Citigroup expects Sainsbury's likefor-like sales for the 13 weeks to January 3, to grow by 4%. Sales growth held up well last year but the broker remains sceptical this will continue in 2009.

Tesco, 2.4p lighter at 358.3p, reports next Tuesday, with like-for-like sales expected to grow 2.5%, helped by extensive opening on Boxing Day. …

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