UK stocks fall in line with continental Europe and US index futures as worries over the strength of the US economy begin to weigh on sentiment. In early trade the FTSE 100 index gives up almost 2% to 6,792.10, a new two-year low, while the FTSE 250 gives up 1.5% to a low for the year of 17,995 points.
Tomorrow sees the release of three closely-watched indicators of the health of the US economy - employment numbers, the change in non-farm payrolls and average hourly earnings.
On the results front, packaging firm DS Smith (SMDS) reports strong first half earnings with sales up 15% to £3.1bn thanks to its acquisition of US firm Interstate and pre-tax profits up 27% to £162m as margins continue to expand.
The company’s net debt position, which some point to as a reason for the stock under-performing the market this year, is down to 0.8 times earnings before interest, depreciation and amortisation (Ebitda) against the firm’s medium-term target of less than 2 times.
It is also exploring the sale of its plastics division which could be worth $800m (£630m) and would reduce its net debt position further, but investors remain unimpressed and the shares drop another 4% to 312p.
INVESTORS RALLY BEHIND TED BAKER
Clothing retailer Ted Baker (TED), which made the news earlier this week over reports of its founder’s behaviour, reports slightly lower sales for the 16 weeks to the beginning of December.
Wholesale sales were down as expected while retail sales were higher helped by store openings and a strong online performance up 18%. On a positive note sales growth improved in the last 8 weeks as the weather turned colder.
Shares gain 3% to £15.13, stemming the tide of losses suffered at the start of the week.
Meanwhile online competitor boohoo group (BOO) gets away with a slap on the wrist from the Committee of Advertising Practice (CAP) and the Advertising Standard Authority (ASA) for its latest advertising campaign. The company has promised to take the CAP’s guidance on board while the shares mark time at 182p.
Retail logistics specialist Clipper (CLG) delivers a positive trading update with sales up 14% to £228m and pre-tax profits up 17% to £9.3m.
Existing customers including Asda, ASOS (ASC) and Wilko continue to drive sales while the company continues to sign up new customers such as Sports Direct (SPD) and Halfords (HFD).
Clipper doesn’t name names but some of its key customers saw record volumes over the Black Friday/Cyber Monday weekend.
Still, investors prove hard to please and the shares are left drifting down 2% to 285p.
EUROMONEY BUYS DATA FIRM
Business information and events group Euromoney (ERM) announces the purchase of 100% of the equity of The Deal from parent company TheStreet for $87.3m in cash.
The Deal offers a digital subscription product covering news and data on mergers and acquisitions (M&), private equity and restructuring. The purchase includes BoardEx, an executive profiling platform. Investors appear unmoved however with the shares barely changed at £12.76.
Stocks going ex-dividend today include Babcock (BAB), Biffa (BIFF), Big Yellow Group (BYG), Cake Box Holdings (CBOX), Cranswick (CWK), Daily Mail (DMGT), De La Rue (DLAR), DFS Furniture (DFS), Fuller Smith & Turner (FSTA), Greene King (GNK), Homeserve (HSV), Investec (INVR), PayPoint (PAY), Pets At Home (PETS), Premier Asset Management (PAM), Royal Mail (RMG), Telford Homes (TEF), Vertu Motors (VTU), VP Group (VP.), Wincanton (WIN) and YouGov (YOU).
