News

Footsie staged an impressive recovery after slumping this morning and now sits in the blue.

Dow Jones fell 777 points following the rejection by US Congress of the planned $700bn mortgage bail-out, leading to predictions of another day of heavy falls on Footsie.

Tesco has helped settle some nerves. Britain's biggest retailer met expectations with a 10.3% rise in first-half pre-tax profits despite the tough retail environment. Underlying pre-tax profit rose to £1,453m in the 26 weeks ended 23 August with sales, including VAT, up by 14.1% to £28.1bn.

Enterprise Inns is also going well. It forecast underlying earnings will fall by about 5% for the second half of the year and 3% for the full year overall, but dividends will be in line with market expectations. Plans to convert to a REIT have been put on hold. Punch Taverns and Mitchells & Butlers have rallied in sympathy.

Royal Bank of Scotland issued a statement saying its acquisition of parts of ABN Amro will not be affected by the sale of Fortis's interests in RFS Holdings, but its shares slumped nonetheless. Lloyds and HBOS are also under pressure.
Oil groups are lower on the slide in the crude price overnight. Tullow and Cairn are both lower. Miners, though, are pushing ahead with Xstrata and ENRC higher.

Computer games retailer Game Group reported a better-than-expected first half performance and raised its guidance for full year like-for-like sales from 5-10% to 8-12%.

Plumbing supplies distributor BSS anticipates that revenues and earnings for the first half will be in line with expectations, with positive like for like growth, despite the more uncertain economic environment. The group's financial position remains strong and there have been no material event or transaction in the period.

Bus and train revenue growth has continued strong at FirstGroup in the half year to September. "With excellent prospects for growth in all our markets the outlook remains positive," it said.

Shares in FirstGroup were also given a boost by a note from Collins Stewart retaining its 'buy' recommendation on the bus and train operator.

KBC Peel Hunt has lowered its recommendation on Dawnay, Day Treveria (DDT) to 'reduce' from 'hold' after the German property group's interim results.

Finncap has lowered its rating on cheese and butter maker Dairy Crest to 'hold' from 'buy', citing the squeeze of higher input costs and weak economic conditions.

Defence and security company QinetiQ has completed its restructuring of its Europe, Middle East and Asia operations ahead of plan and under budget. In a pre-close trading update the board confirmed that the company continues to perform in line with expectations.