City sources predict FTSE 100 will open up 15 points from yesterday's close of 5,211. Stocks to watch
Talks to sell Candover to a Candian pension fund have collapsed, leaving the future of the struggling private equity group even more uncertain. Alberta Investment Management approached the venture capitalist over a possible takeover and cash injection in April, but after formal talks started, the discussions have unwound.
Accountancy software provider Sage has named Guy Berruyer, currently head of its mainland Europe & Asia operations, as the man to take over from chief executive Paul Walker. Berruyer has spent 13 years at the firm, joining to run its French operations in 1997. He made it to the board in January 2000.
BP confirmed this morning that it has succeeded in stopping the flow of oil pouring into the Gulf of Mexico for the first time in three months. The shutdown is part of an “integrity test” to see if the leaking wellhead can finally be contained. The test started last night and will last at least 6 hours and could last up to 48 hours. It is expected that no oil will be released to the ocean during the test.
In the Press
Goldman Sachs has agreed to pay $550 million to settle charges that the Wall Street bank tricked investors into buying a toxic mortgage product during the housing boom. The payout includes $100 million to Royal Bank of Scotland, the Times reports. As part of the settlement, Goldman acknowledged that its marketing of Abacus 2007-AC1, a synthetic collateralised debt obligation (CDO), was flawed. The bank agreed to change its procedures.
George Osborne tried to deflect intense criticism about the way the Office for Budget Responsibility (OBR) has operated by announcing yesterday that the Treasury select committee would have power of veto over the chairman of the new body. The Chancellor said he was advertising for a new permanent head of the OBR after it emerged recently that the interim its leader, Sir Alan Budd, is to retire this summer. Mr Osborne said the new appointment would be made by "mid-August", the Independent reports.
A shareholder action group wants Sir Victor Blank, former Lloyds Banking Group chairman, to be extradited to the US to defend the controversial takeover of HBOS in 2008. Lloyds Action Now (LAN), made up of shareholders in the bank, is trying to bring a lawsuit in America, alleging that Sir Victor and the chief executive of Lloyds, Eric Daniels, misled investors about HBOS’s dire condition when they thrashed out a takeover of the bank at the height of the financial crisis, in September 2008. Sir Victor subsequently stepped down, the Times reports.
Newspaper tips
Experian is more than just a credit checker, having transformed itself into a global information company whose business extends to more than 90 countries, offering services such as fraud prevention and risk management. Growth will undoubtedly come from its ability to open up new markets and offer new services. On about 14 times full-year earnings, they are probably fairly valued at the moment, and the dividend yield is minimal.Experian still shows just about enough potential to make the shares worth holding for now says the Independent.
Cookson shares began the year at about the 422p mark and are barely above that now, despite some violent swings in the intervening months. Ceramics maker Cookson is the key UK industrial proxy for global steel volumes, which could well be lower over the second half of the year. But these concerns appear to be over the price, so much so that despite steel production rising in recent months, Cookson has been trading down. The market is being too harsh on the short term, overlooking the potential for strength in the future. Buy ahead of interims in August says the Independent.
Electrocomponents is thus one of those useful bellwethers of how well the world economy is doing and, on that basis, yesterday’s trading statement should give us all reason to be cheerful. Group revenues were ahead by 24% year-on-year, and the rate of growth accelerated during the quarter. The shares are selling on more than 15 times this year’s earnings. Up with events, but a solid long-term hold says the Times.
US close
The Dow rallied late to erase almost all of its early heavy losses. After hours, Google's latest numbers disappointed, but there was better news from BP in the Gulf of Mexico.
Dow Jones closed down 7 points at 10,359, having been over 100 points lower at one stage. Nasdaq was flat at 2,249. The S&P 500 gained 1 at 1,096.
Google's second quarter figures fell short of expectations, even though net income increased to $1.84bn. Underlying earnings rose 24% to $6.45 per share, slightly shy of forecasts of $6.51 per share. Sales rose to $6.82bn and to $5.1bn excluding partnership revenue. The search engine giant added that the average per-click rate it charges advertisers has been rising, helping its results.
Goldman Sachs, meanwhile, is to pay $550m and change its business methods as part of a settlement with the Securities and Exchange Commission over allegations of misleading marketing of sub-prime mortgage backed products. Goldman Sachs acknowledged it made a “mistake” and that marketing materials for the instruments had “incomplete information,” the SEC said. 
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