MID SESSION MARKET WRAP

The Mid Session Wrap is a report on the biggest movers in the FTSE 100 and macroeconomic news that impacts movements in share prices. The report also previews macroeconomic data that is due to be released over the course of the session.

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US benchmarks open firmer on back of housing and jobs data

January 17 2013, 3:10pm
US benchmarks open firmer on back of housing and jobs data

US indices have started on the front foot, boosted by jobs and housing data.

US housing starts in December rose to a level not seen since June 2008, hitting 954,000 on annualised basis. That was a 12.1% gain on a downwards revised November figure of 851,000 units.

On the jobs front, first time jobless claims last week fell to a five-year low of 335,000 from 372,000 the week before.

Switching to corporate news, computer networking equipment provider Juniper Networks saw its stock rise, as JPMorgan (JPM) upgraded it to ‘overweight’.

The US broker reckons “stronger optical and routing spending” is on the way. Juniper’s peer Infinera was also moved to ‘overweight’ by JPM.

Elsewhere in the tech sector, private equity firm Silver Lake Management and its cohorts are reportedly close to arranging the US$15bn or so that would be needed to take computer box-shifter Dell private.

Online marketplace eBay is bid up after its revenue came in ahead of some analysts’ estimates.

In the financial arena, wealth manager BlackRock is on he up following its figures but Bank of America is heading south after its fourth quarter net income slipped to US$732mln from US$1.99bn the year before.

Citigroup is also off the pace after its profit increase disappointed the market.

The Dow Jones is up 34 at 13,545 while the broader based S&P 500 a quarter of a point firmer at 1,473. The tech-heavy NASDAQ Composite climbs 10 to 3,173.

In the UK, investors continue to tuck in to Associated British Foods (LON:ABF) after a sterling performance over Christmas from its clothing retail chain Primark.

The company saw retail sales grow 25% from the previous year, ahead of expectations, sending shares up 7%.

Total group revenue rose 10% in the period, boosted also by a 12% increase in sugar sales.

The figures prompted City firm Panmure Gordon to raise its target price to 1,670p from 1,450p. The broker kept its ‘hold’ rating on the shares. AB Foods’ share price is currently up 5.7% at 1,645p.

The stock’s rise helped the FTSE 100 rise 20 points or 0.15% to 6,124.

Fund manager Aberdeen Asset Management (LON:ADN) is the worst performing blue-chip after an underwhelming interim management statement.

Assets under management at the end of 2012 stood at £193.4bn, up from £187.2bn at the end of September. The group secured net new business of £1.1bn, compared to flat net inflows in the previous quarter, but the stock has risen by 76% over the last year and without the wow factor, the trading statement prompted some to bank profits.

Mining heavyweight Rio Tinto (LON:RIO) was also in the doldrums in the wake of the sacking of CEO Tom Albanese, whose disastrous acquisition strategy resulted in Rio Tinto announcing another US$14bn in write-downs today.

City analysts looked on the bright side, calling the shock departure a victory for shareholders, with Citigroup going so far as to upgrade the stock to ‘buy’.

Xstrata (LON:XTA) suffered, losing 0.4% after a downgrade to ‘neutral’ from French broker Exane BNP Paribas, while fellow mining giant Anglo American (LON:AAL) shed 0.4% on a downgrade to ‘underperform’ from the same broker.

Former FTSE 100 stalwart Home Retail (LON:HOME) soared 12% after boosting Christmas sales at Argos, with tablets the big seller over the festive season.

Investors cheered the news that its online push seems to be paying off after fears it could struggle to cope with the changing consumer demands.

Chief executive Terry Duddy had the City’s abacus rattlers in a bean-sliding frenzy as he revealed headline profit before tax for the year would be about £10mln higher than current market expectations at £83mln.

Dixons Retail (LON:DXNS) followed it north after an impressive an impressive set of numbers from the Currys and PC World owner.

Further down the food chain, Nyota Minerals (LON:NYO) climbed 6% after edging closer to being able to dig for gold at its Tulu Kapi project in Ethiopia.

The country’s mining ministry confirmed the AIM-listed mineral explorer’s definitive feasibility study (DFS) met the requirements for a mining licence.

Fellow mining minnow Afferro Mining (LON:AFF) moved 3.5% higher as it confirmed that Indian giant Jindal Steel and Power is one of a number of the junior miner's potential suitors.

Excite Energy (LON:XEL, CVE:XEL) is wanted after Merchant Securities bigged up the stock as it initiated coverage.

Merchant Securities analyst Brendan Long described Bentley as "one of the most attractive undeveloped fields in the North Sea".

The City broker rates Xcite as a ‘buy’ with a 167.8p price target.


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