City sources predict FTSE 100 will open up 11 points from its previous close of 5,132. Stocks to watch
BP said the cost of the clean-up in the Gulf of Mexico has risen to $3.5bn from $3.12bn a week ago and $2.65bn at the end of June, although some say that figure could eventually hit $70bn. The first half of August remains the current estimate of the most likely date by which the first relief well will be completed and kill operations performed, the company said.
Strong online sales and a boost from the World Cup helped pizza delivery firm Domino’s post another bumper set of results. Profits jumped 30% to Ł17m, from Ł13.1m, in the half year. That’s ahead of consensus of Ł16.5m. Sales for the 26 weeks ended 27 June 2010 grew by 20.8% to Ł237.1m (2009: Ł196.4m).
Rio Tinto has referred Canadian miner Ivanhoe's breaches of a private placement agreement to arbitration following its adoption of the shareholders rights plan. The mining heavyweight, which recently increased its stake in Ivanhoe to 29.6%, has warned Ivanhoe before it adopted the plan would breach Rio Tinto's contractual rights. But Ivanhoe directors went ahead and adopted the plan on April 6 over Rio Tinto's “strong objection”.
In the Press
A battle to break into Britain’s crowded high street banking market is in the offing with an American private equity firm and a British consortium both gearing up for acquisitions. The New York-based JC Flowers is in talks to take control of Kent Reliance, a building society with only one branch. The deal would give Flowers — which unsuccessfully bid for Northern Rock in 2007 — a banking licence. Flowers would then be in a position to create a new bank that could swallow up to ten more building societies, creating a lender with significant impact on the high street, the Times reports.
Nationwide, meanwhile, has called time on any further deals with rival building societies after coming to the rescue of three of its smaller competitors during the financial crisis, The Independent has learnt. The decision has been taken because of the potential negative impact on the society's members were it to step in to rescue another struggling rival, the Independent reports.
Taylor Wimpey is negotiating with lenders over a refinancing package that would increase the ability of the UK’s second-largest volume housebuilder to buy land. The company is seeking to refinance its bonds and bank loans after last year completing a Ł1.55bn debt restructuring that extended the repayments due on its debts to July 2012, the FT reports.
Newspaper tips
Soon-to-float online grocery group Ocado is certainly in a growth market. The online food sector is expected to almost double over the next five years from Ł3.7bn to Ł7.2bn. Ocado needs to be a major player in this growth for its model to work and there are too many structural and operational risks. It should be remembered that Ocado also has strong online rivals in the shape of Tesco, Asda and J Sainsbury. Avoid Ocado says the Telegraph.
Titan Europe makes huge wheels for tractors, dumper trucks, mobile cranes and similar large vehicles used by farmers, construction groups and miners. Titan shares have had a good run since last month's trading statement, rising from 26p to 46p. But there is still plenty of mileage in the stock. Buy says the Mail on Sunday.
Rockhopper is an oil explorer based in the Falklands and there is every indication that it has made a truly significant offshore discovery in the past few months. While there are plenty of indications that Rockhopper will prove a deeply rewarding investment, there is always a chance that the well will disappoint. Investors should make sure they book some profits - then stay on board for what could be an exciting ride says the Mail on Sunday. US close
Wall Street made ground again near the close to end the day, and week, in good heart ahead of the earnings season next week.
Across the markets, the Dow Jones gained 59 at 10,198. Nasdaq ended 21 points higher at 2,196. The S&P 500 rose 7 points to 1,077.
Sales of wholesale goods dropped unexpectedly for the first time in more than a year. Wholesale inventories rose 0.5% to a seasonally adjusted $398.8bn, the Commerce Department said Friday.
US economists have cut their forecasts for US growth but they are still predicting reasonable growth rates for the coming year. The average forecast growth figure is 2.8% for the year to June 2011, down from 2.9% previously. Consumer spending is not growing as fast as originally expected.
Alcoa will kick off the second-quarter results season on Monday.
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