Stocks edge up on strong retail sales
Tesco dropped 2.6 per cent to 327.95 pence after the UK’s largest retailer reported the first profit drop in almost two decades after increasing investment to halt declining supermarket sales.
Trading profit fell 11 per cent to £1.59 billion ($2.6 billion) in the first half of the financial year, also hurt by reduced earnings in South Korea and central Europe, Cheshunt, England-based Tesco said today. The average estimate of 12 analysts compiled by Bloomberg was £1.62 billion.
FirstGroup plunged a record 21 per cent to 193.4 pence. The UK Department for Transport cancelled the West Coast competition to run trains from London to Scotland citing the discovery of “serious technical flaws” in the franchise process. FirstGroup had won the route in August from billionaire Richard Branson’s Virgin Group.
SODEXO CLIMBED 2.3 per cent to €60.83 in Paris after Credit Suisse Group AG raised its recommendation for the world’s second-biggest provider of catering services to outperform, the equivalent of buy, from neutral.
Vestas Wind Systems A/S fell 5.2 per cent to 37.90 Danish kroner after the management of the world’s biggest wind-turbine maker failed to convince investors at a capital markets day of its plans to resurrect the company. Haakon Levy, an analyst with DNB Markets, advised investors on September 24 to hold onto the stock because it might rise on the presentation.
The shares also fell after the company late yesterday said a former chief financial officer was involved in two unauthorised deals in India that may cost the company as much as €18 million.
US STOCKS gained ground after new data showed that businesses hired 162,000, 22,000 more than the media tipped by economists polled by Bloomberg.
PulteGroup, the largest US homebuilder by revenue, jumped 6.2 per cent to $16.52. DR Horton gained 5.6 per cent to $21.86 while Lennar climbed 6.3 per cent to $37.21.
Best Buy rose 3.7 per cent to $17.60 after Reuters reported that founder Richard Schulze and at least four private-equity firms are looking at the company’s finances with a view to a possible $11 billion buyout.
Family Dollar Stores climbed 3.4 per cent to $68.22. The discount retailer forecast fiscal 2013 earnings of $4.10 to $4.40 a share.