Market Wrap, Tuesday 27th May 2008

Despite bing up at 6,147 at one point, the FTSE closed at 6,058.5, down 28.8 points on the session, whilst the FTSE 250 closed down 43.4 points at 10,034.2.  The FTSE 100 has had 3 lower sessions in a row, now.

Over the pond, by the time London closed the DJI was down nearly 5 points at 12,475, whilst the S&P500 was actually half a point up at 1,376.5, whilst the Nasdaq was 12 points to the good at 2,444.  The US government gave some good news in that there had been a slight gain in new home sales, but added that data showed that consumer confidence was disappointing. The Dow had opened up a little, but backed off, despite oil falling back to about US$130 bbl.

Back here in London, the heavyweight oil companies fell a bit due to the price of the black stuff finally pullng back. BP closed down 13.5p at 616.5p, RD Shell down 10p at 2,152, and Cairn Energy closed down 72p to 3,371.

On to the housebuilders, who suffreed again due to Hometrack reporting that prices were down for the 8th month in a row, with prices this month actually 1.9% down on a year ago. Then Citigroup was reported to have managed to place 7m barratts shares at 208p a go, causing barrats to close down 9.25p at just under 211p.  Peer Taylor Wimpey closed down nearly a penny at just shy of 96p.  Persimmons, who closed down 5p at 509p, is actually the only housebuilder remaining in the FTSE 100 list, and it may even lose that next month in the reshuffle.

Retailers didn’t do too well as a very wet Bank Holiday Weekend caused people to stay at home instead of spend cash, and then weekend press reports said that DIY sales were down 20% on last year.  B&Q owner Kingfisher fell nearly 2p to 138.1p in reaction.  Other retailers were down too, with Next down 18p at 1,185, and DSG International closed down 2p at 58.5p, not helped by a new Credit Suisse target of 34p, down from 50p.

Vodafone, which had been up this morning, closed down 2.8p at 160.5p after news that chief executive Arun Sarin will be replaced by his deputy, Vittorio Colao. Vodafone’s results were good, though, with group turnover at £35.5 bln for year end 31st March, and boasted a 4.2% growth.

As mentioned this morning, SABMiller closed up 85p at 1,309 after bid rumours that InBev were sniffing with intent on a bid.  InBev is also looking at Anheuser-Busch Cos Inc. and may consider SABMiller as a target too, depending on progress with Anheuser-Busch.  SAB has impressed ING, who raised their target to 1,550p, up from 15-quid.

British Airways did well today as well, helped by the price of oil dropping a bit, closing up 8.25p at just shy of 215p.

Compass Group, the commercial caterer, closed up 11.5p at 373.25p as Credit Suisse upped its target to 425p, 10p higher, saying the recetn results were very good.

GlaxoSmithKline closed down 17p at 1,104 after a Morgan Stanley downgrade to ‘underweight’ from ‘equal-weight’.  Peer Shire, however, closed up over 10p at 871.5p after its Hunter syndrome treatment Elaprase has now been approved in Brazil.