Thursday May 15, 04:13 PM
London shares remain up midafternoon as Wall St cautiously gains on mixed data
LONDON (Thomson Financial) - Leading shares remained up midafternoon as Wall Street reversed initial gains to trade moderately higher following a mixed bag of economic data, with UK banks tempering index gains amid further rights issues woes following Barclays (LSE: BARC.L - news) ' update.
At 3:50 p.m., the FTSE 100 index was up 32.2 points at 6,248.2, while the FTSE 250 (news) index was up 44.1 points at 10,319.4.
On Wall Street, the Dow Jones Industrial Average was 13.7 points higher at 12,912.0 in early deals, with the Nasdaq Composite (NASDAQ: news) up 7.18 at 2,503.88 and the S&P 500 index adding 0.84 at 1,409.50.
U.S. stock, which had initially opened lower, picked up in early deals as investors struggled to discern a direction for the economy after reports showing a modest increase in jobless claims and weakness in the manufacturing sector.
The Labor Department said the number of laid-off workers applying for jobless benefits rose last week by 6,000 to 371,000 -- near the average analyst forecast, and suggesting that the labour market remains weak but in check.
Another better-than-expected report came from the Philadelphia Federal Reserve, which said regional manufacturing activity is contracting in May more slowly than in April, and more slowly than analysts had expected.
However, the Federal Reserve dealt the market a blow when it said industrial output sank for the second straight month in April.
In London, BT Group (LSE: BT-A.L - news) was the top FTSE performer as investors cheered its fourth quarter and full year results, which prompted both Nomura and Collins Stewart (LSE: CLST.L - news) to reiterate their 'buy' cases.
BT was up 12-1/4 pence at 235-1/2.
A positive trading update also helped Cadbury take on 24-1/2 to 671-1/2 after the confectionary company said that following the demerger of its Americas Beverages, the new company is off to a strong start.
SABMiller (LSE: SAB.L - news) ticked up 40 pence to 1,243 after it said its full-year pretax profit increased 15 percent to $3.64 billion, thanks to price increases and mix improvements, beating analyst expectations for $3.54 billion.
JP Morgan raised its price target to 1,583 pence from 1,525 in response and repeated its 'overweight' stance, while Credit Suisse said it believes the company's high-growth emerging market exposure makes it one of the best stocks in the brewing sector.
Elsewhere among broker changes, Cairn Energy (LSE: CNE.L - news) rose 157 pence at 3,540, boosted in part by oil prices hovering around $123 a barrel as the weaker dollar continued to support buying, and also by UBS (Virt-X: UBSN.VX - news) upping its stance to 'buy' from 'hold' with a raised price target of 4,500 pence as part of a positive sector review
The review also gave Tullow Oil (Dublin: TQW.IR - news) a fillip, up 19-1/2 pence at 922, as the broker hiked its target to 1,050 pence from 690, while oil services firm AMEC (LSE: AMEC.L - news) took on 20 pence at 843 as UBS upped its target to 935 pence from 875. Mid-cap peer Dana Petroleum (LSE: DNX.L - news) added 29 pence at 1,907 as UBS also upgraded the stock to 'buy' from 'neutral' as part of the review.
The London Stock Exchange added 16 pence at 1,097 after Sanford Bernstein upgraded the shares to 'market perform' from 'underperform', while cutting its target price to 1,100 pence.
On the downside, banking stocks again dominated the loserboard, with Barclays down 8-3/4 to 418-1/2, after saying it has not ruled out a rights issue to bolster its capital reserves as it reported a decline in its first-quarter profit, held back by a further 1 billion pound hit from the global credit crunch.
Other banking issues also performed poorly, with Royal Bank of Scotland (LSE: 91ID.L - news) down 46-1/4 at 273, as the stock traded ex-rights, while HBOS (LSE: HBOS.L - news) lost 6-3/4 at 463-1/2 and HSBC fell back 3 at 890-1/2.
Shares in Thomas Cook Group slipped in afternoon trade after the group reported a narrowing adjusted operating loss in its first half results, which Landsbanki said contained no surprises but that it continues to prefer TUI Travel (LSE: TT.L - news) .
Thomas Cook (LSE: TCG.L - news) lost 8-1/4 pence at 261-1/4.
On the second line, DSG International (LSE: DSGI.L - news) was by far the worst mid-cap performer, slumping 8.3 percent or 5-3/4 pence to 63-1/2 after the electricals retailer said it will slash its total dividend payout by 50 percent and announced a reorganisation of its business, including the closure of some Currys stores.
Seymour Pierce downgraded its stance on DSG to 'sell' from 'hold' in reaction.
A broker downgrade also hit WH Smith, down 15-1/2 pence at 402, as Citigroup (NYSE: C - news) cut its recommendation to 'hold' from 'buy' on valuation.
Bradford & Bingley (LSE: BB.L - news) was out of favour, off 7 pence at 137, as brokers moved to cut target prices following the mortgage bank's rights issue announcement on Wednesday.
News Balfour Beatty will place 43.32 million shares sent the shares 14-3/4 pence lower to 448-3/4.
And uninspiring trading updates from Ferrexpo (LSE: FXPO.L - news) and Informa (LSE: INF.L - news) saw the stocks lose 8-1/4 pence at 389-3/4 and 7-3/4 pence at 376, respectively.
Not all was doom and gloom, however, with Invensys (LSE: ISYS.L - news) up 6.6 percent, or 19-1/4 pence, at 324-1/2 following robust full-year results and a bullish outlook statement, which saw Cazenove repeat its 'outperform' recommendation in reaction.
Findel (LSE: FDL.L - news) also outperformed, 15-3/4 pence better at 295-1/2, as confidence in the stock returned amid director share-buying, following weakness in the morning on the back of disappointing full-year numbers.
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