Uroxatral

INVESTORS MOVED out of the drinks group Diageo sending the stock down 15.5p to 644.5p amid concerns of an unfavourable outcome to the imminent decision by the US Federal Trade Commission on the group's planed sale of its Pillsbury food business to General Mills. The market was concerned that the FTC may impose a number of tough conditions on the $10bn (pounds 6.9bn) deal. This, coupled with the affects on the business of the general slowdown, may lead to General Mills attempting to renegotiate the price downwards or, on a less drastic note, result in the process being delayed further, traders fretted.

Analysts at Deutsche Bank also weighed on Diageo yesterday as they downgraded their rating from "buy" to "market perform" as part of a re-rating of the whole drinks sector. The are understood to have told clients that they were concerned about the stock's valuation, the possibility of a negative decision from regulators and rotation out of the sector. Although Deutsche said it was not worried about the effects of the slowdown in the US, it scaled back its earnings projections for the current year and next.

The FTSE 100 ended 143.3 points better at 5,153.1 thanks to strong gains on Wall Street, having been lower for most of the session. Dealers were at pains to give a reason for the strong gains although the talk was of short covering by hedge funds and heavy buying from fund managers who have too much cash in their portfolios.

Having spent most of the day nursing heavy falls Autonomy ended 20p better at 250p, reflecting gains from its peers across the Atlantic on the Nasdaq. Late on Tuesday the Cambridge-based software company issued its third profit warning of the year, saying it expects to report weaker- than-expected third-quarter sales. Investors should expect sales of $9m to $11m in the quarter compared with previous forecasts of more than $13m (pounds 9bn). On this news, JP Morgan downgraded its rating to "market perform" from "buy" and noted that visibility for Autonomy remains weak.

Sage rose 21.5p to 191p after reassuring the market that despite the tragic events of 11 September the group's full-year results will be in line with estimates. Vague gossip of a potential bid for EMI pushed its shares 13p higher to 261p. Banks were very much in favour as Royal Bank of Scotland gained 80p to 1,630p, Barclays firmed 87p to 2,047p and HSBC firmed 16p to 747.5p. Dealers have been astounded by the recent performance of the trio which have each risen more than 25 per cent in the past 13 days.

Logica was not so lucky, slipping 21p to 715p after Goldman Sachs downgraded the stock to "market perform" from "market outperform". The broker pointed out that since its upgrade on 17 September Logica had risen over 20 per cent. Wolseley fell 7p to 443p after Huttig Building Products, one of the company's few quoted competitors in the US, lowered its third- quarter earnings expectations by 50 per cent. Around 70 per cent of Wolseley's business comes from the US, prompting some analysts to argue that the group will find it hard to escape a similar set-back.

Friends Ivory & Sime was 36p higher at 173.5p as its chief executive, Howard Carter, bought 20,000 shares at 140p each. After yesterday's strong performance, he is sitting on a profit of pounds 6,600. SkyePharma rose 7p to 60.75p after receiving a "letter of approval" from the US Food and Drug Administration for its benign prostatic hyperplasia drug UroXatral. Final approval from the FDA is expected by the end of the year, with a US launch likely in January next year, according to analysts at SG Securities. They reiterated their "strong buy" rating on SkyePharma and 125p target price.

The software specialist Alphameric improved 21.5p to 74.5p on confirmation it had received a preliminary bid approach. Kewill Systems and Torex were touted as possible bidders. Retail Decisions gained 3.75p to 18p after launching a new initiative aimed at combating credit card fraud with partner TSYS, the largest processor of Visa and MasterCard branded cards in the US.

It was disaster for Reflec, the reflective inks group, which slumped 0.87p to 2.25p. The company talked of an uncertain outcome for its full year to February in a statement to the Stock Exchange amid warnings of postponed or cancelled contracts in the US and Asia and the weak performance of its Viewercom subsidiary. One analyst advised investors to "steer well clear" of the stock.

A BID for Metrodome, up 2.5p at 24p, may not be far way. It is understood that the AIM-listed video and film distributor is in talks with a German media company aimed at securing an offer for the group. The shares hit an all-time low of 15.5p at the start of the month, valuing Metrodome at around pounds 1.7m and making it look very vulnerable. The group fell into the red after its acquisition of the merchandising business Home Entertainment last year.

MARKET MOVERS

Enterprise Oil 523p (up 34p, 6.9 per cent). New chief executive appointed.

British Airways 164p (up 9.5p, 6.2 per cent). Hopes of state aid for European airlines.

ARM Holdings 307p (up 17p, 5.9 per cent). Had of results on Monday with gains aided by a strong Nasdaq.

Shell 543.5p (up 27.5p, 5.3 per cent). Morgan Stanley ups its estimates highlighting the potential for improving returns.

Canary Wharf 450p (up 21p, 4.9 per cent). Positive comments from Goldman Sachs and ongoing share buy-back support.

Cambridge Antibody 1,525p (up 125p, 8.9 per cent). Signs US development alliance with Merck for research into HIV.

St Ives 369p (up 24p, 6.9 per cent). Rally after profit warning.

Einstein Group 1.25p (up 0.25p, 25.0 per cent). Sells its specialist professional training company for pounds 825,000.

Air Partner 236.5p (up 41.5p, 21.3 per cent). Says current trading performance remains strong as bookings rise 15 per cent.

Photobition 4.75p (up 0.75p, 18.7 per cent). Rally in wake of Equitable Life disposal of its holding.

GUS 534p (down 12p, 2.2 per cent). Falls ahead of trading statement today as broker Williams de Broe downgrades to "hold" from "buy".

Energis 63p (down 7p, 10.0 per cent). Profit taking after recent strong gains as Deutsche Bank advises short term "sell".

Sterling Publishing 12.5p (down 11p, 46.8 per cent). Full year profit warning on slumping advertising sales.

Xenova 28p (down 5p, 15.2 per cent). Herpes vaccine trials fail.

Jarvis Hotels 81p (down 9.5p, 10.2 per cent). Warns that current trading has been further undermined by September 11 attacks in pre- close period trading update.

Arcadia 215p (down 1.5p, 0.7 per cent). Sells four of its loss- making retail chains for pounds 35m to a management buyout team.

SEAQ TRADES: 125,171

SEAQ VOLUMES: 2.21bn

Copyright 2001 Independent Newspapers UK Limited
Provided by ProQuest Information and Learning Company. All rights Reserved.