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US stocks in a holding pattern

Published: 16:14 15 Oct 2013 BST

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US markets are mixed, as investors wait on further developments in the US Budget negotiations saga.

Those weary of this latest exercise in brinkmanship from US politicians have at least had some corporate earnings to mull over, but even these gave mixed signals, with banking giant Citigroup easing back after its figures came in below expectations, while fizzy pop peddler Coca-Cola rose on the back of increased sales volumes in North America.

The Dow Jones industrial average is off 0.3% at 15,254 but the S&P 500 and the NASDAQ Composite are both more or less unchanged at 1,709 and 3,814, respectively.

Apple, meanwhile, is celebrating something of a coup, luring Britain’s most highly paid chief executive, Angela Ahrendts, away from Burberry (LON:BRBY) to be senior vice president for retail and online stores.

She will be replaced by chief creative officer Christopher Bailey by mid-2014, who will join the board as part of a promotion that sees him take on both roles.

The departure of Ahrendts leaves just two women in charge of FTSE 100 companies.

Ahrendts said: “Burberry is in brilliant shape, having built the industry's most powerful management team, converted the business to a dynamic digital global retailer, created a world class supply chain, state of the art technology infrastructure, sensational brand momentum and one of the most closely connected creative cultures in the world today.”

Her exit was met with concern from investors who have watched Burberry’s share price more than treble during her seven years as boss. The shares tumbled 6.3% to £14.84, though that has not prevented the FTSE 100 from notching up a 0.5% gain at 6,543.

The top riser among UK blue-chips is Petrofac (LON:PFC), closely followed by mining major Rio Tinto (LON:RIO), which is up 3.9% to £32.05 after the group’s copper production as its new mine in Mongolia underpinned a much better than expected third quarter for the mining giant.

Copper output jumped by 23% in the three months to September, as Oyu Tolgoi in Mongolia continued its ramp-up, while Kennecott in the US recovered from its wall slide earlier this year.

Advertising conglomerate WPP (LON:WPP) is wanted, after it announced that this week’s acquisition is IM2.0, a digital advertising and media agency in China.

Outside of the top-tier, hedge fund group Man Group (LON:EMG) is back in fashion, rising 6% after UBS gave it a more upbeat write-up.

Bellway (LON:BWY) is up 5.2% after reaping the rewards of the government’s Help to Buy scheme, which helped profits rise by a third last year to £141mln.

Britain’s fourth biggest housebuilder said the government loans were to thank for satisfying “previously restrained consumer demand”, improving the availability of mortgages for first-time home buyers.

It meant 8% more homes were sold in the year to July 31, with the average selling price up 3% to £193,000.
The strong numbers prompted a 50% jump in the dividend to 30p a share, described as a “massive” increase by broker Panmure Gordon.

The bulls are outgunning the bears on the Royal Mail (LON:RMG) share issue. Trading officially started today, and the shares are up 2.7%.

AIM oil explorer Fastnet Oil & Gas (LON:FAST) is up 11% to 19.25p after hailing BP’s (LON:BP.) farm-in to offshore Morocco as an “an unequivocal validation by the oil industry” of the region.

BP has done a deal with Kosmos for three blocks offshore Morocco, one of which is Foum Assaka, where Fastnet has an 18.75% stake.

BP will take 26.3% non–operating stake in Foum Assaka through the farm-in, with Kosmos’s stake reduced to 29.9%.
dotDigital (LON:DOTD) was another strong riser, up 8.9% to 19.88p after mailing in a forecast-beating set of full-year results and surprising the market with the proposal of a maiden dividend.

The software-as-a-service specialist, which is behind the dotMailer email marketing tool, welcomed a 16% rise in turnover to £13.8 million, from £11.9mln in 2012, and an 18% increase in pre-tax profits to £3.3mln, up from £2.8mln.

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