Stocks fall as Greek aid delayed
Market Movers
techMARK 2,047.28 -0.43%
FTSE 100 5,735.58 -0.22%
FTSE 250 11,776.08 -0.38% London's benchmark FTSE 100 index dropped into the red in early trading on Wednesday morning after Eurozone finance ministers delayed a decision on the next tranche of the Greek bailout.
Matthew Nelson, a financial sales trader from Spreadex, said this morning: "The poor sentiment has not been aided by the fact that the Israel/Gaza ceasefire is still hanging in the balance and Hewlett Packard’s row over their acquisition of Autonomy.
"Perhaps unsurprisingly the dollar, often viewed as a safe haven, has strengthened as sentiment worsens and equities are hit."
The Eurogroup last night was unable to thrash out an agreement on how to finance a two-year extension in Greece’s commitments. While some of the country’s lenders – such as Germany, the Netherlands and Finland (the other Troika) - are willing to consider a temporary suspension of interest payments, they refuse to put more money on the table.
"I don’t know when [the aid disbursements] will happen," said Eurogroup head Jean-Claude Juncker after the meeting in Brussels. "Greece has delivered, now it is up to us." FTSE 100: Johnson Matthey drops on gloomy outlook
Platinum refiner Johnson Matthey was a heavy faller after reporting a 6% drop in pre-tax profits in the first half and saying that it doesn't expect things to pick up in the latter part of the fiscal year.
Chief Executive Neil Carson said: "Whilst precious metal prices have improved from their lows during the summer, largely due to the labour unrest in South Africa, the outlook in some of our other markets has weakened and visibility remains limited. We therefore expect that the group's performance in the second half will be similar to the first half of the year."
Contract caterer Compass sank early on in spite of its announcement of a further £400m share buy-back next year. The company saw profits break through the billion-pound barrier in the 12 months to the end of September.
Real estate peers Land Securities and British land were high risers this morning after Morgan Stanley upgraded its ratings on the stocks to 'overweight'. Meanwhile, the same broker lifted its recommendation for banking group Lloyds to 'equal weight', providing a lift to shares.
Utilities groups were in demand this morning in spite of the government's plans to simplify energy bills and offer customers the cheapest tariffs possible. United Utilies, Severn Trent, Pennon and National Grid were making gains this morning.
Xstrata and Glencore continued to rise after shareholders yesterday voted in favour of their propped merger. However, Xstrata Chairman Sir John Bond announced that he would retire after the completion of the tie-up after shareholders did not give the green light to the proposed retention arrangements for management. FTSE 250: Imagination Tech falls on rival bid for MIPS
Imagination Technologies has said that it has become aware that MIPS Technologies, a US computing company which Imagination is set to acquire, has received an unsolicited proposal from CEVA to acquire all of its outstanding shares. Shares tanked early on.
Car and bike parts retailer Halfords dropped after saying that full-year profits will be slightly below consensus estimates.
Sports apparel group JD Sports Fashion edged higher after seeing like-for-like sales growth pick up slightly in the third quarter despite seeing what it labelled as a "tough" environment.
Property firm Capco gained after receiving the approval of another London council for its 10.1m square-foot Earls Court Masterplan. | AIM/Small Cap Report | FTSE 100 - Risers
United Utilities Group (UU.) 672.00p +1.97%
Severn Trent (SVT) 1,575.00p +1.81%
British Land Co (BLND) 524.00p +1.75%
Land Securities Group (LAND) 786.50p +1.22%
Xstrata (XTA) 997.50p +1.10%
Glencore International (GLEN) 335.00p +0.98%
National Grid (NG.) 703.00p +0.86%
BG Group (BG.) 1,038.00p +0.68%
Pennon Group (PNN) 608.00p +0.66%
Lloyds Banking Group (LLOY) 45.58p +0.65%
FTSE 100 - Fallers
Johnson Matthey (JMAT) 2,185.00p -6.02%
Compass Group (CPG) 690.50p -2.61%
Vodafone Group (VOD) 159.45p -1.76%
Vedanta Resources (VED) 1,064.00p -1.75%
Eurasian Natural Resources Corp. (ENRC) 270.60p -1.60%
Rio Tinto (RIO) 2,980.50p -1.57%
Randgold Resources Ltd. (RRS) 6,565.00p -1.57%
Fresnillo (FRES) 1,951.00p -1.46%
Kingfisher (KGF) 274.20p -1.33%
Evraz (EVR) 227.40p -1.17%
FTSE 250 - Risers
Domino Printing Sciences (DNO) 549.00p +1.67%
Workspace Group (WKP) 302.40p +1.24%
Law Debenture Corp. (LWDB) 401.00p +1.01%
TUI Travel (TT.) 260.70p +0.85%
Bovis Homes Group (BVS) 504.00p +0.80%
Dunelm Group (DNLM) 627.50p +0.80%
Petra Diamonds Ltd.(DI) (PDL) 104.20p +0.77%
Ocado Group (OCDO) 75.20p +0.74%
Salamander Energy (SMDR) 182.20p +0.72%
SEGRO (SGRO) 224.70p +0.67%
FTSE 250 - Fallers
Imagination Technologies Group (IMG) 415.50p -5.74%
Halfords Group (HFD) 330.80p -4.12%
Menzies(John) (MNZS) 582.00p -3.40%
Redrow (RDW) 152.40p -2.87%
Talvivaara Mining Company (TALV) 102.70p -2.84%
HICL Infrastructure Company Ltd (HICL) 122.00p -2.48%
London & Stamford Property (LSP) 108.50p -2.25%
Lonmin (LMI) 304.10p -2.12%
Savills (SVS) 415.10p -1.96%
Inmarsat (ISAT) 560.00p -1.84% |
| Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Crunch time for the Eurogroup FTSE-100: -0.29%
Dax-30: -0.33%
Cac-40: -0.43%
FTSE-Mibtel 30: -0.44%
Ibex 35: -0.48%
Stoxx 600: -0.23%
European equities have begun the day with small losses after Eurozone finance ministers failed last night to reach an agreement on how to finance giving Greece two more years to meet its deficit cutting commitments. That has already resulted in some strong criticism from the main ratings agencies this morning.
At the heart of the matter is whether or not the Mediterranean country is to be given any sort of debt ‘relief.’ As matters now stand, Greece’s ratio of debt to gross domestic product is forecast to reach no less than 190% by 2014; a dire situation indeed.
To be taken into account, German Chancellor Angela Merkel faces elections next year and Greek citizens are not the only weary (and wary) ones.
The reaction in currency markets was immediate, with the single currency falling by 0.53% in its main cross – versus the US dollar – to 1.2747.
Following all of the above, and in remarks to broadcaster Europe 1 Radio, French Finance Minister Pierre Moscovici stated that an agreement is very close and that it only needs the final "touches". His opposite number at the IMF, Christine, on the other hand, was of the opinion that "we are not quite there yet" although progress was made.
From a sector stand-point the worst performance on the DJ Stoxx 600 is now to be seen in the following sectors: Telecommunications (-0.75%), Chemicals (-0.72%) and Travel&Leisure (-0.71%). Light data calendar today Dutch house prices fell by 0.2% month-on-month in October, after a drop of 0.5% in the previous month.
The rate of growth in Switzerland’s money supply has fallen to 8.6% from 8.9% before. Oil futures edge up The euro/dollar is now falling by 0.41% to the 1.2762 dollar level.
Front month Brent crude futures are now rising by 0.345 dollars to the 110.21 mark on the ICE. UK Event Calendar INTERIMS
Halfords Group, HICL Infrastructure Company Ltd, Hyder Consulting, Intermediate Capital Group, Johnson Matthey, Omega Diagnostics Group, QinetiQ Group, UK Mail Group
INTERIM EX-DIVIDEND DATE
Carphone Warehouse Group, Great Portland Estates, HICL Infrastructure Company Ltd, Hill & Smith Holdings, Invensys, Investment Company, London & Stamford Property , Metric Property Investments , Morgan Crucible Co, Next, Prime People, Printing.com, Sainsbury (J), Synergy Health, TalkTalk Telecom Group , TEP Exchange Group, Vedanta Resources, Vodafone Group, Walker Crips Group
QUARTERLY EX-DIVIDEND DATE
Carnival
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
Crude Oil Inventories (US) (15:30)
Initial Jobless Claims (US) (13:30)
Leading Indicators (US) (15:00)
MBA Mortgage Applications (US) (12:00)
U. of Michigan Confidence (US) (15:00)
Q3
JSC KazMunaiGaz Exploration Production GDR (Reg S), Zhaikmunai LP GDR (Reg S)
FINALS
Avon Rubber, Compass Group, Optos
SPECIAL EX-DIVIDEND PAYMENT DATE
Narborough Plantations
EGMS
VietNam Holding Ltd, VinaLand Ltd
AGMS
Aberdeen Asian Smaller Companies Inv Trust, Active Capital Trust, Impax Asian Environmental Markets, International Ferro Metals Group, JPMorgan Global Markets Emerging Income Trust, Pantheon International Participations, Ruffer Investment Company Ltd Red PTG Pref Shares, Sabien Technology Group, Stellar Diamonds
UK ECONOMIC ANNOUNCEMENTS
BoE Interest Rate Minutes (09:30)
FINAL EX-DIVIDEND DATE
Euromoney Institutional Investor, GETECH Group, Hornby, Keystone Inv Trust, United Drug |
| US Market Report | Stocks flat as H-P weighs on sentiment
Market movers
Dow Jones: 12,789 (-0.05%)
Nasdaq: 2,917 (+0.03%)
S&P 500: 1,388 (+0.08%) US stocks finished flat on Tuesday as some decent housing data was offset by a disappointing announcement from Hewlett-Packard (H-P) and renewed concerns about the 'fiscal cliff'.
Eurozone worries were also rolling on in the background as Eurozone finance ministers met in Brussels to discuss Greece. Meanwhile, investors were reacting to the news that Moody’s last night stripped France of its prized ‘AAA’ rating.
Federal Reserve Chairman Ben Bernanke warned the New York Economic Club that the US central bank may not have the tools to offset the 'fiscal cliff'.
However, he did add that "cooperation and creativity to deliver fiscal clarity — in particular a plan for resolving the nation’s longer-term budgetary issues without harming the recovery — could make the new year a very good one for the American economy.” Hewlett-Packard slumps after $8.8bn charge
H-P shares tanked after the opening bell today after was forced to take a $8.8bn impairment charge to write down the value of British software giant Autonomy, which it purchased last year for $10.3bn in an effort to expand into cloud-computing. The company said in a statement: “HP is extremely disappointed to find that some former members of Autonomy’s management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy’s acquisition by HP.” To make matters worse, earnings forecasts for the full year failed to live up to analysts' expectations. The shares hit a low of $11.70 today, their worst level since October 2002. News Corp. has agreed to acquire 49% of the so-called YES network, or Yankee Global Enterprises. Electronics retailer Best Buy dropped after announcing pro-forma earnings per share of three cents, versus market expectations for 12 cents. Online deal outfit Groupon is another outperformer this morning. Last night hedge fund Tiger Global disclosed that it has accumulated a 9.9% stake in the firm. Better than expected housing data Housing starts rose by 3.6% month-on-month in October, hitting an annualised rate of 894,000 (consensus: 840,000) after a small downwards revision to the previous month's figures. That is a four-year high.
Housing permits – a leading indicator for activity levels - fell to 866,000 in October, from 894,000 in September (consensus: 864,000). Economists at Barclays Research however said: “although permit activity suggests some moderation in start activity may lie ahead, the degree of moderation would not be significant enough to remove what appears to be a robust uptick in the level of start activity.”
Weekly Redbook retail sales came in flat, versus the previous reading of 0.2%.
S&P 500 - Risers
Masco Corp. (MAS) $16.30 +5.57%
PulteGroup Inc. (PHM) $16.73 +5.22%
Lennar Corp. Class A (LEN) $38.09 +3.48%
J.C. Penney Co. Inc. (JCP) $17.28 +3.19%
Biogen Idec Inc. (BIIB) $147.96 +3.09%
Archer-Daniels-Midland Co. (ADM) $26.33 +3.05%
Sears Holdings Corp. (SHLD) $49.30 +3.01%
Dollar Tree Stores Inc. (DLTR) $41.57 +2.77%
Whirlpool Corp. (WHR) $100.82 +2.75%
Computer Sciences Corp. (CSC) $36.87 +2.67%
S&P 500 - Fallers
Cliffs Natural Resources Inc. (CLF) $30.54 -13.46%
Best Buy Co. Inc. (BBY) $11.98 -12.91%
Hewlett-Packard Co. (HPQ) $11.69 -12.07%
Patterson Companies Inc. (PDCO) $32.97 -8.47%
Apollo Group Inc. (APOL) $18.60 -5.20%
Alpha Natural Res (ANR) $7.22 -4.69%
Hormel Foods Corp. (HRL) $30.00 -4.15%
Staples Inc. (SPLS) $11.70 -4.14%
Metropcs Communications Inc. (PCS) $10.56 -3.95%
Safeway Inc. (SWY) $16.11 -3.85%
Dow Jones I.A - Risers
Bank of America Corp. (BAC) $9.63 +1.48%
Walt Disney Co. (DIS) $48.49 +1.21%
American Express Co. (AXP) $55.86 +1.14%
Boeing Co. (BA) $72.56 +0.83%
Home Depot Inc. (HD) $63.84 +0.81%
McDonald's Corp. (MCD) $85.68 +0.75%
Johnson & Johnson (JNJ) $69.65 +0.58%
Merck & Co. Inc. (MRK) $43.54 +0.46%
Pfizer Inc. (PFE) $24.25 +0.46%
Procter & Gamble Co. (PG) $68.17 +0.37%
Dow Jones I.A - Fallers
Hewlett-Packard Co. (HPQ) $11.69 -12.07%
Intel Corp. (INTC) $19.49 -3.75%
Alcoa Inc. (AA) $8.24 -1.14%
Mondelez International Inc. (MDLZ) $25.54 -1.12%
Chevron Corp. (CVX) $103.52 -0.80%
3M Co. (MMM) $89.02 -0.61%
International Business Machines Corp. (IBM) $189.37 -0.51%
AT&T Inc. (T) $33.67 -0.43%
Caterpillar Inc. (CAT) $83.29 -0.40%
E.I. du Pont de Nemours and Co. (DD) $42.78 -0.35% |
| Wednesday newspaper round-up | Greece, H-P/Autonomy, Bank of England... Eurozone finance ministers on Wednesday yet again put off a decision to extend up to 44bn euros of long-overdue aid to Greece, after failing to overcome lasting divisions over how fast to cut Athen’s mounting debt pile. After almost 12 hours of intense talks that stretched into the early hours, eurozone governments called a further meeting next week to finally settle differences between themselves and the International Monetary Fund. 'I don’t know when [the aid disbursements] will happen,' said Jean-Claude Juncker, the chair of the eurogroup of finance ministers, as he emerged from the meeting. 'Greece has delivered, now it is up to us,' he added, in reference to austerity measures implemented by Athens. [Financial Times]
The millionaire founder of former FTSE 100 darling Autonomy was forced to defend his reputation yesterday as the US computing giant Hewlett-Packard wrote off $8.8bn (£5.5bn) on its acquisition of the software firm and accused managers of "serious accounting improprieties". The technology entrepreneur Mike Lynch, who set up Autonomy in 1996, sold it to HP for $10.3bn in August last year, making about £500m from his stake in the business. Mr Lynch, who left the US company in May, is worth £480m, according to the Sunday Times Rich List.
Mr Lynch said he was "shocked" by the claims, saying: "It's completely and utterly wrong and we reject it completely." He also said the huge write-down was a "distraction" from the worst results in HP's 70-year history. HP's shares slumped 11 per cent as the company tumbled to a $12.7bn full-year loss as a result of the charge. The company "intends to aggressively pursue this matter in the months to come". [The Independent]
More money printing or lower interest rates would simply stoke inflation without driving growth, a Bank of England policymaker has warned. Martin Weale, a member of the Monetary Policy Committee (MPC), said that Britain’s weak rate of productivity made it difficult to justify any further stimulus. His comments drive another nail into quantitative easing’s (QE) coffin after the Bank voted against extending the £375bn programme this month. [The Telegraph]
Chevron, the US oil group, has filed a complaint calling for an investigation of the comptroller of New York state, alleging that he acted improperly in urging the company to settle a $19bn claim for environmental damage in Ecuador. The company alleges that Thomas DiNapoli, who as comptroller is the administrator of the state’s employees’ pension funds, backed shareholders’ resolutions and made public statements to put pressure on Chevron, as an “apparent quid pro quo exchange” for campaign contributions. [Financial Times]
The first Monday in December is set to be a record day for online shopping in the UK, with transaction volumes on the internet surging by more than a fifth. Consumers are expected to spend £320m on Visa cards on 3 December alone, following the final pay day for many before Christmas on 30 November. Visa Europe forecasts that 6.8 million purchases will be made on "Mega Monday", 21 per cent higher than last year. [The Independent]
It may not be having much luck in its campaign to have the Health Lottery outlawed, but the setback did not prevent the National Lottery operator from pulling in record half-year revenues. Camelot, which is owned by Ontario Teachers’ Pension Plan, of Canada, lifted sales by 8.1 per cent to almost £3.53 billion in the six months to September 29, driving a 3.8 per cent increase in the amount contributed to good causes to £952.8 million. It paid out a record £1.86 billion in prize money, a rise of 10 per cent, lifting the total paid to players since the launch of the National Lottery in 1994 to £43 billion. More than 3,000 lottery millionaires have been created. [The Times] |
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