London afternoon: Stocks slide on US jobless news

6th Nov 2009 14:04

Leading shares are retreating rapidly in the wake of worse than expected US non-farm payrolls data. October non-farm payrolls data showed the US unemployment rate rose to 10.2% from 9.8% in September. The number of jobs lost in October was 190,000, versus expectations of 175,000 job losses.So far, the gloomy US employment situation has not completely taken the shine off Royal Bank of Scotland and British Airways, both of which are firmer despite announcing eye-popping losses this morning. More huge write-offs sent Royal Bank of Scotland (RBS) deep into loss over the past three months. Nine-month losses now total £2.06bn against a profit £1.8bn this time last year. Fellow recipient of tax-payer largesse, Lloyds Banking Group has surrendered early gains, however. The stock received an early boost this morning from Citigroup, which changed its position on the stock from 'hold' to 'buy' in the wake of Lloyds' decision to buy its way out of the government's asset protection scheme. Citi has bounced its price target for Lloyds all the way up to 104p from 37p previously.JPMorgan, meanwhile, has raised its target price for Barclays from 220p to 280p, though it continues to advice clients to be underweight in the stock. British Airways is gaining altitude, despite reporting a record loss of £292m. The loss before tax of £244m before restructuring costs, compares with a profit of £52m last year. Revenue was down 13.7% to £4.1bn. Net losses came to £208m. The company has urged the Unite union to withdraw its plans for a strike ballot and resume talks with the carrier.The price of oil is back below $80 a barrel, which is good news for British Airways but bad for oil producers such as BP and BG Group.While British Airways and RBS see their share prices react positively to the announcement of heavy losses, pest controller Rentokil Initial sees its shares take a hammering, despite more than doubled profit at actual exchange rates during the third quarter. The company saw losses at its parcels arm City Link narrow substantially.Property group Segro has sold Great Western Industrial Park in Southall, West London to Universities Superannuation Scheme, the second largest private pension scheme in the UK, for £110.4m. Elsewhere in a generally buoyant property sector Great Portland Estates is wanted after JPMorgan Chase upgraded the stock from 'neutral' to 'overweight'. Also on the upturn are sector heavyweights Hammerson and Land Securities.Interim profits slumped at Tate & Lyle, with the sugar and sweeteners group cautioning that US markets remain under pressure. Sales in the half year to September increased by 7% to £1.82bn. Adjusted operating profit reduced by 1% (16% in constant currency) to £148m, with underlying profit before tax down by 13% (25% in constant currency) to £112m.Smith & Nephew's pre-tax profit jumped 45% in the third quarter and the knee and hip joint supplier expects a good outcome for the full year. Pre-tax profit for the three months to 26 September grew to $173m from $119m a year ago, lifting it to $495m for the nine months from $402m in 2008.A pick up in corporate businesses in the UK helped stockbroker Collins Stewart swing back into profit over the last four months. Total revenues in the period to end October rose by 4% to £57m with overall revenues for businesses based outside the US significantly ahead of the same period in 2008. United Business Media reports trading is mixed across its range of businesses, but overall the aggregate adds to a stable performance across the group.Dechra Pharmaceuticals, which focuses on the veterinary sector, has started the financial year in line with expectations with revenue in the first quarter 5.1% ahead of last year.