MARKET REPORT - LONDON

A RAFT of new numbers on the US economy dragged London stocks up yesterday.

A Business Strategies survey hailing the return of the feelgood factor and figures from the Halifax Building Society, showing house prices rising at their strongest pace for almost seven years, underpinned sentiment.

But official statistics, showing a rise in business failures in the second quarter, despite the economic recovery, kept investors in check during the morning.

It was a different story after lunch, however, as dealers watched their screens for news from across the Atlantic.

The FTSE index closed near its best level of the day up 36.2 on Thursday night's close at 3770.6.

Cadbury Schweppes was one of the star performers after rumours in the United States of an approach from the consumer products giant Unilever. Cadbury was up 20p to 536p, while Unilever gained 11p to 1,258p.

With the second half of the banks reporting season due next week, HSBC was 25p up to 116p, Barclays added 11p to 837p and NatWest was 10p better at 655p.

Bass advanced 17p to 815p as the market awaited more details on its proposed purchase of the Carlsberg Tetley joint venture.

Allied Domecq, one of the sellers, was down 3p to 452p.