Wall Street ahead as US goes to the polls

16.50: Britain’s markets strengthened throughout the day as investors focused on better-than-expected results from retailers Associated British Foods (ABF.L) and Marks & Spencer (MKS.L).

The benchmark FTSE 100 added 0.65%, or 38 points, to 5,878 and the Mid-250 index took on 0.4%, or 45 points, to 12,076.

In the US presidential and congressional elections are under way, with polls indicating the Democrats will retain control of the Senate and Republicans will continue hold a majority in the House of Representatives. Surveys are also indicating Barack Obama has a slight lead over his Republican opponent, Mitt Romney.

On Wall Street markets got off to a strong start as the Dow Jones Industrial Average added 0.71% to 13,205, the Standard & Poor's 500 index took on 0.5% to 1,424, and the Nasdaq Composite index gained 0.16% to 3,004.

FTSE 100 rises; Marks & Spencer struggles to shine

09.21: High-street retailer Marks & Spencer (MKS.L) added 7.5p, or 1.9%, to 396p as it reported falling profits in the first half for the second year running, but nonetheless beat estimates.

Despite an increase in its international sales, up 3.6%, pressures in the UK market and a poor showing from its clothing department held profits back. However, earnings beat estimates and the full-year gross margin is expected to be at the top end of forecasts.  

The figures come as British retail sales slowed sharply in October, down 0.1% on a like-for-like basis compared with a year ago.

Analysts at Seymour Pierce upgraded their price target on the stock from 325p to 365p but retained a ‘hold’ rating.

Freddie George, analyst at Seymour Pierce, said: ‘The stock has outperformed the FTSE All Share by almost 20% and considering the 10% downgrade to consensus earnings during the year has been re-rated against the market by over 30%. It is thus likely to see some profit taking and broadly in line with the sector.’

UK markets also inched ahead: the FTSE 100 added 0.2%, or 13 points, to 5,852 and the FTSE Mid 250 took on 0.15%, or 18 points, to 12,049.

All eyes will be on the US later today as the country wakes up to presidential and congressional elections.

Engineer Babcock (BAB.L) took on 34p, or 3.4%, to 955p as its first-half profit before tax rose 13% and it reported a strong bid pipeline ahead.

Associated British Foods (ABF.L) shed 7p, or 0.5%, to £13.59 as it posted a 17% rise in full-year profit after a strong performance from its AB Sugar operations and growth at its Primark stores.

The world’s largest security company, G4S (GFS.L), added 7.6p, or 2.9%, to 268p as revenues rose 6.3% in the first nine months of the year.

Despite the failure to provide enough security guards for the Olympics, which cost the company £50 million, revenues improved from the 5% recorded in the first half of the year, with organic growth in emerging markets up 9%.

Packaging company DS Smith (SMDS.L) slipped 0.7p, or 0.3%, to 214p as the group announced trading in line with expectations. Full-year margins for the business are expected to be between 7% and 9%. The stock is the biggest holding in Edward Legget’s Standard Life Investments UK Equity Unconstrained fund, which features in Citywire Top Stocks.  

Gas producer BG Group (BG.L) took on 1.9p, or 0.2%, to £10.91 as it closed the sale of its 60% stake in Comgas for $1.7 billon (£1 billion). Debt on the beleaguered gas company’s balance sheet has been reduced by $1 billion (£625 million) following the sale.

Citywire Top Stock Imagination Technologies (IMG.L) took on 6.8p, or 1.5%, to 471p as it acquired the operating business of MIPS Technologies for $60 million (£38 million).

MIPS produces CPUs (central processing units), and the acquisitons will be financed from existing cash at Imagination Technologies. The stock is the biggest holding in Nigel Thomas’s AXA Framlington UK Select Opportunities fund, making up 4% of the portfolio.