Market report: Tuesday close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

TRYING to claw back some of yesterday's 187-point fall proved hard work, with stock market bulls initially struggling to make headway.

It took an opening rally by the Dow on Wall Street this afternoon to get things going. Early indications from the futures market had pointed to the Dow extending its 405-point fall of the past two days. As a result, the FTSE 100 index took its time to move into positive territory. It ended the day 75.6 points aheasd at 3797.4.

Six Continents is pressing ahead with demerging its pubs and restaurants division and plans to return £700m to shareholders.

The City was happy with the trading statement but appalled by a buried-away dividend cut next year. Credit rating agencies Moody's and S&P said they may downgrade their long-term debt ratings for the group. Despite buy recommendations issued by Merrill Lynch and WestLB Panmure, the shares crashed 62p to 531p.

Northern Rock failed to hold on to an early lead, trading 16 1/2p cheaper at 639 1/2p. The mortgage lender said it was comfortable with the forecasts of the top dozen analysts, who are predicting full-year pre-tax profits of between £316m and £325m. But sentiment was clouded by the profits warning from WS Atkins that saw the shares fall 137p, or 73%, to 52p.

There were some big lumps of troubled engineer Cookson moving through on the ticker as the price slipped 3/4p to 19 1/2p - just 1p above its low. They included lines of 6.47m shares and 3.72m at 19p.

Asda's move to offer flu jabs to customers in its 256 stores nationwide looks like being good news for PowderJect Pharmaceuticals, 5p better at 256p. PowderJect hit the headlines earlier this year when it was awarded a major contract to supply the Government with a smallpox vaccine to be used in the event of a chemical attack by terrorists.

It later emerged that the contract had been awarded shortly after chief executive Paul Drayson, a staunch Labour Party supporter, made a £50,000 donation to party funds.

Tate & Lyle fell 9p to 361p, soured by Merrill Lynch's move to downgrade the shares from buy to neutral. It is worried about prospects for the second half, the impact of rising sweetener prices and the recovery of higher sweetcorn costs.

MyTravel continued to reel from yesterday's profits warning that saw the price plunge 40%. The shares retreated a further 6 1/2p to 75p as US securities house Goldman Sachs said it has downgraded its rating to market performer from market outperformer, and also reduced its full-year forecasts for this year from £114m to £91.3m. Rival Lehman Brothers has downgraded from overweight to equal weight and dropped its target price from 230p to 105p.

The massive debt restructuring at cable TV firm Telewest that left shareholders owning just 3% of its equity was welcomed by the City today as the shares added 66% to 1 1/4p, a gain of 1/2p. It is a far cry from the 563p peak they hit in early 2000.

The start of the fourth quarter triggered a clutch of suspensions to share trading in companies that have been late in delivering their reports and accounts. They include Einstein Group, suspended at 1/2p,

Public Network, frozen at 2 3/4p, Room Service Group, halted at 0.32p, and Advanced Technology, stopped at 10 1/2p.

The Daily Mail's Geoff Foster on yesterday's trade
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