This Morning in London shares were marginally lower in early deals, with no sign of last week's rally continuing. Among early movers, Northern Rock (NRK) rose a further 10p to 170.5p after the Wall Street Journal reported this morning that US investment funds Apollo Management and Blackstone have shown interest in buying out crisis-hit UK bank. The two firms showed interest separately last week, the paper said, citing people close to the matter, although spokesmen for the companies declined to comment. Sentiment was further lifted after the Sunday Times reported that Citigroup (CGP), the world's biggest bank, was planning to offer the troubled mortgage lender a £10bn loan. The news helped Alliance & Leicester (AL.) gain 13p to 806p and HBOS (HBOS) add 2p to 950p, with a Bear Stearns upgrade boosting sentiment. At 9:50 the FTSE-100 was 3.3 points lower at 6,592.5 with the FTSE-250 ahead 12.8 points at 11,403.2.
BROKER RECOMMENDATIONS
Bear Stearns has upgraded HBOS (HBOS) to outperform from underperform and downgraded Royal Bank of Scotland (RBS) to underperform from outperform.
Cazenove has downgraded New Star Asset Management (NSAM) to in-line from outperform.
Citigroup has downgraded Regus (RGU) to sell from hold (cutting the price target to 110p from 160p) and says hold FirstGroup (FGP) (610p target).
Credit Suisse has initiated coverage of Mitie Group (MTO) appending an outperform recommendation and a 320p price target and reiterates outperform on Northern Rock (NRK) (cutting the price target to 100p from 115p).
The broker has outperform on Tate & Lyle (TATE) (cutting the price target to 520p from 640p) and upgraded Xstrata (XTA) to outperform from neutral (3800p price target).
Credit Suisse has outperform on SABMiller (SAB) (raising the price target to 1550p).
ING has Unilever (ULVR), Reckitt Benckiser (RB.) and Cadbury (CBRY) as its top picks in the European Food Manufacturing Sector.
KBC Peel Hunt says buy Lookers (LOOK) and Rok (ROK).
Merrill Lynch has resumed coverage of Barclays (BARC) appending a buy, cutting the price target to 800p from 885p and of Rexam (REX) appending a buy recommendation and a 600p price target.
The broker reiterates buy Inmarsat (ISAT) (raising the price target to 530p from 475p) and has added Standard Chartered (STAN) to its Europe-1 list.
Panmure Gordon's preferred stocks in the Software and IT Services Sectors are Autonomy (AU.), Aveva (AVV) and Fidessa (FDSA).
The broker reiterates buy Driver Group (DRV) (126p target) and says sell Friends Provident (FP.) (160p target) and Northern Rock (NRK) (100p target).
Panmure says buy Phoenix IT (PNX) (423p target).
NEWS ROUND-UP
Last Friday in New York shares closed higher. In fact, the S&P actually reached an all-time high, with the other major indices recording solid weekly gains, after the jobs report showed, as-expected, growth in September and a surprise upward revision to Augusts’ data, calming fears about the economy. The Dow Jones closed up 91.70-points at 14066.01, the Nasdaq added 46.75-points to 2780.32, while the S&P put on 14.75-points to 1557.59 (having hit 1561.91 during the day, which is an all-time high). On the week, the Dow has gained 1.2%, the Nasdaq put on 2.9%, while the S&P added 2%.
On this day in:-
1891 - The first official street collections for charity in Manchester
and Salford for 'Lifeboat Day.'
1905 - Charles Nessler first used a permanent waving machine on a woman's
hair. The cost of the seven hour 'perm' was 10 guineas (£10. 10s).
1908 - The children's classic, 'Wind in the Willows' by Kenneth Grahame,
was published for the first time.
1925 - Jockey Eileen Joel became the first woman to win an open race,
at Newmarket.
1952 - A major rail crash at Harrow killed 112 and injured a further
200.
1965 - The official opening of one of London's tallest landmarks, the
'Post Office Tower'. Prime Minister Harold Wilson made the first telephone
call.
1967 - Great Britain introduces the 'breathalyser' - to check the alcohol
levels of drivers. A driver in Somerset became the first to be breathalysed.
1967 - A Bolivian guerrilla force led by Marxist revolutionary Ché
Guevara was defeated in a skirmish with a special detachment of the
Bolivian army. Guevara was wounded, captured, and executed soon after.
Born in Argentina, Guevara believed that a man of action could revolutionize
a people. He played a pivotal role in the Cuban Revolution of 1956-59
and encouraged Fidel Castro to pursue his communist, anti-American agenda.
After holding several positions in Castro's government, he disappeared
from Cuba in 1965. He secretly travelled to the Congo, where he trained
rebels and in 1966 resurfaced in Bolivia as leader of another guerrilla
group. Since his death, Guevara has been idolised as a hero of leftist
Third World revolution.
1973 - Great Britain's first legal commercial radio, LBC, began broadcasting.
1996 - The Sun newspaper admitted that the picture it published allegedly
showing Diana, Princess of Wales with Captain James Hewitt, had been
a hoax.
