This Morning in London major shares were firmly higher in early deals, after the Dow soared to a record high yesterday. Tesco (TSCO) topped the FTSE-100 leaderboard, up 15.5p at 451p, after reporting that pretax profit for the 26 weeks to August 25th was £1.29bn, up 18% on a year earlier. The dividend rose 13.9% to 3.2p a share. UK sales increased by 5.4% to £18.3bn, incorporating like-for-like sales growth excluding fuel of 3.5%. Tesco had previously reported first quarter like-for-like sales growth of 4.7% so the second quarter represented a slowdown, primarily due to the wet weather and tough comparatives owing to last year's hot summer weather and World Cup. At 9:45 the FTSE-100 was up 36.6 points at 6,542.8 with the FTSE-250 ahead 116.1 points at 11,197.6.
BROKER RECOMMENDATIONS
Altium Securities upgrades Keller (KLR) to buy from add with an £11.50 target, reiterates buy May Gurney (MAYG) with a 370p target and has a hold on RM (RM.) raising target to 195p from 185p, raising estimates.
Bear Stearns initiates coverage of United Business Media (UBM) with a peer perform rating and 709p target, upgrades Emap (EMA) to peer perform with an 891p target and initiates coverage of Informa (INF) with an outperform and 506p target.
Citigroup downgrades IG Group (IGG) to hold from buy.
Collins Stewart reiterates buy for British Airways (BAY).
Credit Suisse upgrades Dana Petroleum (DNX) to outperform from neutral.
Evolution Securities initiates coverage of Autonomy (AU.) with a buy and 999p target, reiterates buy and 460p target for Tesco (TSCO), has a buy and 900p target for WSP (WSH) and a buy and 17p target for Nautical Petroleum (NPE).
Goldman Sachs downgrades Vernalis (VER) to neutral from buy.
HSBC, in a review of UK retailers, upgrades Kingfisher (KGF) to overweight from neutral, raising target to 235p from 228p, but downgrades Next (NXT), HMV (HMV) and Marks & Spencer (MKS) to underweight from neutral cutting the respective targets to £18.60 from £19.60, 114p from 118p and 620p from 675p.
The broker also trims Home Retail's (HOME) target to 530p from 580p maintaining an underweight rating and trims WH Smith (SMWH) target to 400p from 425p retaining a neutral stance.
HSBC warns that the overspending consumer could quickly switch to an underspending one.
The broker cuts Inchape's (INCH) target to 530p from 580p and Travis Perkins (TPK) to £17.60 from £21 retaining overweight stances on both and upgrades Biffa (BIFF) to overweight from underweight.
Landsbanki Securities upgrades Sinclair Pharma (SPH) to buy from hold, reiterates hold Tesco (TSCO), has a hold on Corin (CRG), raising estimates and a buy for Datong Electronics (DTE).
Lehman Bros reiterates overweight for Nokia (NOK).
Merrill Lynch reiterates buy Cairn Energy (CNE), raising target to £28.50 from £23 and has a neutral for Lloyds TSB (LLOY).
Numis upgrades Autonomy (AU.) to add from hold with a 960p target, BSkyB (BSY) to add from hold 801p, Debt Free Direct (DFD) to buy from add 285p, Findel (FDL) to buy from add 877p, Tenon (TNO) to buy from add 77p, Tesco (TSCO) to buy from add 570p and WPP Group (WPP) to buy from add 861p.
Sanford Bernstein has an outperform on ARM Holdings (ARM), a market perform for Sainsbury (SBRY), raising target to 600p from 520p, a market perform and 265p target for William Morrison (MRW) and an outperform and 530p target for Tesco (TSCO).
SG Securities reiterates buy and €30 for Nokia (NOK).
UBS upgrades Derwent London (DLN) to neutral from sell, raising target to £18 from £17.50, has a sell and £24.20 target for Go-Ahead Group (GOG) and a buy and 780p target for FirstGroup (FGP).
NEWS ROUND-UP
Last Night in New York stocks rallied at the outset of the fourth quarter, pushing the Dow to record heights as traders tried to put this summer's credit crisis behind them after a hefty profit-warning from Citigroup. After crossing the 14,000-level for the first time since late July, the Dow Jones gained 191 points to close at a new record of 14,087. Earlier, the blue-chip average hit a new record intraday high of 14,115. All but two of the Dow's 30 components advanced, led by Citigroup and financial peers American Express and JP Morgan Chase. The best performer on the Dow was McDonald's, which rose 2.8%, while General Motors fronted the Dow's declines, losing 1.8%. The S&P advanced 20 points to 1,547, and the Nasdaq gained 39 points to 2,741, trading at its highest levels since February 2001.
On this day in:-
1996 - In Great Britain, Mandy Allwood lost the last five of the octuplets she had been expecting after a 19-week pregnancy.
1983 - Welsh politician Neil Kinnock was elected leader of the Labour Party.
1953 - A photograph of William Pettit, wanted for murder, was shown on BBC TV at the request of the police, the first time in Great Britain that television had been used to help find a wanted man.
1944 - The Warsaw Uprising ended with the surrender of the surviving Polish rebels to German forces. Two months earlier, the approach of the Red Army to Warsaw prompted Polish resistance forces to launch a rebellion against the Nazi occupation. The rebels, who supported the democratic Polish government-in-exile in London, hoped to gain control of the city before the Soviets liberated it. The poorly supplied Poles made early gains against the Germans, but Nazi leader Adolf Hitler sent reinforcements. In brutal street fighting, the Poles were gradually overcome by the superior German weaponry. Meanwhile, the Red Army occupied a suburb of Warsaw but made no efforts to aid the Polish rebels. The Soviets also rejected a request by the Great British to use Soviet air bases to airlift supplies to the beleaguered Poles. After 63-days, the Poles, out of arms, supplies, food, and water were forced to surrender. In the aftermath, the Nazis deported Warsaw's population and destroyed the city. With Warsaw out of the way, the Soviets faced little organised opposition in establishing a communist government in Poland.
1942 - In a freak accident, the Great British liner 'Queen Mary' rammed and sank an escort cruiser off the coast of Ireland, at least 300 crew were killed.
1940 - The cruise liner, the 'Empress of Britain', en route to Canada with Great British children being evacuated during World War II, was sunk by a German submarine in the Atlantic. Great British warships managed to rescue most of the 634 crew and passengers.
1935 - Italian troops invaded Abyssinia.
1925 - The first of London's now traditional red buses, with “roofed-in” upper decks went into service, after the lifting of restrictions that had prevented such buses being used in the capital city.
1909 - Twickenham hosted its first rugby union match, between Harlequins and Richmond.
1901 - The Royal Navy launched its first submarine at Barrow.
1900 - In Great Britain, Keir Hardy became the Labour Party's first Member of Parliament.
1870 - The unified country of Italy selected Rome to be its capital.
1836 - At the end of a 5-year voyage, explorer Charles Darwin returned to Great Britain, having completed a survey of the coast of South America.
1608 - The world's first telescope was demonstrated by Dutch lens-maker Hans Lipperschey.
