London open City sources predict FTSE 100 will open up 28 points from yesterday's close of 5,106.
Stocks to watch
Housebuilder Bovis is selling homes in line with its targeted weekly sale rate and will resume dividend payments at the end of the financial year as long as things continue as they are.
Steady and broad based progress is being made at engineering firm Bodycote leaving it on course to comfortably exceed the highest broker forecast for full year operating profit.
Insulation materials and specialist construction products maker SIG said underlying profit before tax for the first half of 2010 will be above market expectations. Sales in sterling of around Ł1,291m were down some 4.0% compared to Ł1,345m a year earlier, and were around 3.0% lower on a constant currency basis.
In the Press
The government's new tax and spending watchdog was plunged into fresh controversy last night after it was revealed that the Office for Budget Responsibility slashed its forecasts for expected job losses from George Osborne's austerity package in the days leading up to last month's budget, the Guardian reports.
The OBR’s published estimates show that 490,000 public-sector jobs would be lost by 2014-15, with a total of 600,000 by the following year. Had it not tweaked the forecast, that would rise to nearly 775,000. One of the revisions related to employer pension contributions. The OBR pre-empted the results of the Pensions Commission by assuming public-sector employers would lower their future pension contributions, enabling the forecast to show fewer job losses for a given paybill, the FT adds.
British Airways is looking to do a deal with another airline within a year of BA completing its merger with Iberia. BA and the Spanish flag carrier are set to merge under the control of an umbrella company called International Airlines (IACG) by the end of the year. The holding company has been structured to facilitate further acquisitions, and BA’s chief executive Willie Walsh said yesterday that these deals could happen quickly, the Times reports.
Newspaper tips
Galliford Try adopted a glass-is-half-full approach to its full-year trading statement yesterday. The construction and housebuilding group said full-year pre-tax profits will be at the upper end of estimates, after a strengthening of house prices and its construction unit performing well. It looks cheap on a 2010 price to earnings ratio of 12.2 times but public spending cuts are the worry. Sell says the Independent.
Man suffered its seventh successive quarter of client withdrawals during the three months to the end of June and there is no firm evidence yet of a turnaround at the group, whose future has become increasingly dependent on its “black box” AHL managed futures fund. Buying Man gives investors indirect exposure to hedge fund strategies, profitable in boom times but less so when performance lags. Sit on the sidelines until there is more evidence of an AHL recovery says the Times.
Bus and train group First Group is a tricky call. Yesterday's first-quarter trading statement, published alongside the transport group's annual meeting, stressed current performance in line with management expectations and a continuing focus on controlling costs and increasing cash generation. On balance, First Group's cost-cutting and margin-boosting measures just about convince. With the stock down 10% over this year, there is room for a punt. Buy says the Independent. US close
The Dow surged forward again after stronger than expected jobless claims figures. Weekly jobless claims fell to 454,000 from 472,000 in the prior week, better than the 460,000 total analysts had been expecting.
Across the markets, the Dow Jones jumped 120 points at 10,138, with the Nasdaq 15 points higher at 2,175. The S&P 500 added 9 points to 1,070.
Buyers chased bank prices higher after the International Monetary Fund upped its forecast for global economic growth this year to 4.6% from its preliminary forecast of 4.2%.
Positive trading news boosted retailers Abercrombie & Fitch and JC Penney. Weak sales knocked the Gap share price.
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