Newspaper article The Evening Standard (London, England)

US Clouds Have Silver Lining for the Footsie; Market Report

Newspaper article The Evening Standard (London, England)

US Clouds Have Silver Lining for the Footsie; Market Report

Article excerpt

Byline: MICHAEL CLARK

SHARE prices on the London stock market were marked higher for choice at the outset of trading today. But dealers were quick to dispel the theory that this was an appreciation of Chancellor Gordon Brown's efforts yesterday.

They say it was more a reflection on the sad state of the US economy.

The latest report from the Federal Reserve says the American economy is now static.

This will increase pressure on the Fed to make further cuts in interest rates, which will be good news for world stock markets.

The Dow got the message overnight in New York, climbing almost 140 points as investors caught a whiff of cheaper money. In the City, share prices traded in narrow limits as punters gave further thought to the Chancellor's package. The FTSE 100 index rose 7.8 points to 6009.6.

GKN was by far and away the biggest faller among the top 100 companies, losing 75p, or 9%, to 735p after issuing what was tantamount to a veiled profits warning.

Brokers are not happy about the group's heavy exposure to a knackered American economy and say the shares probably have further to fall.

Reuters was another big faller, dropping 34p to 1036p after its US-quoted offshoot Tibco Software issued a profits warning overnight. Tech stocks generally struggled to make headway in the wake of the profits warning from internet service provider Yahoo! and a clutch of other companies.

Vodafone sported a rise of 51/2p to 2073/4p, spurred on by chief executive Chris Gent's presentation in the City yesterday. US securities house Goldman Sachs has retained the shares on its recommended list, with a target price of 420p.

British Regional Airways firmed 1/2p to 118p on confirmation of the bid from rival British Airways, up 33/4p at 3653/4p, as highlighted in Business Day yesterday. The terms value British Regional at 120p, or [pound]78 million. …

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