Banks and drinks companies were in focus, as the market edged higher today.
Standard Chartered added 48p to £16.90 on talk of a possible bid from Singapore-owed investment firm Temasek. There were suggestions yesterday that Temasek could be interested in Lloyds TSB, up 6.5p to 566.5p, but many traders believe Standard would be a more likely target.
Onto the never-ending story, the bid battle for Dutch banking group ABN Amro. Today's development saw ABN effectively given permission to sell its US business LaSalle to Bank of America for $21bn.
This disposal boosts Barclays, which is battling with a rival bidding consortium led by Royal Bank of Scotland. The RBS-led offer was predicated on LaSalle remaining part of ABN, although traders still think RBS may now return with a revised bid to reflect the new circumstances.
Barclays added 6p to 724.5p, while RBS rose 5.5p to 640p.
In the drinks world, Magners cider maker C&C slumped 1.65 cents to €8.45 after the Irish group warned the wet summer was hitting sales volumes. Citigroup pointed out that as well as the weather problems, the company was also facing increased competition from Scottish & Newcastle, and cut its price target from €11.2 to €10. Meanwhile S&N lost 6p to 629p.
JD Wetherspoon fell 1.5p to 555p as Bridgewell said it would one of the pub groups most effected by any poor summer trading.
Bridgewell said: "The most highly operationally geared pub company is Wetherspoon where we have an underweight rating and a 500p price target. It will release its current trading in a pre-close statement on Thursday."
Soft drinks groups also lost their fizz. Britvic fell 10.75p to 356.75p on fears it may follow C&C and reveal a summer downturn. The shares were not helped by Altium Securities starting coverage with a reduce rating and 330p price target.
"While we remain of the view that Britvic should benefit from its cost reduction programme, this may not be sufficient to offset what we suspect is a challenging trading environment," said Altium. "In our view AG Barr offers more defensive qualities. It also has net cash, versus around £440m of debt at Britvic."
However, worries about poor trading because of the weather outweighed Altium's add recommendation for AG Barr, and the company's shares lost 21p to £12.85.
Cadbury Schweppes, which encompasses soft drinks and chocolate, fell 8p to 655.5p after it said the recent floods had disrupted production at its Sheffield mint and wine gums factory. Sweet-making has been temporarily suspended, and it is expected to be several weeks until things are back to normal.
The company is also set to be fined early next week over the salmonella scare last summer.
But overall leading shares were in a positive mood. The FTSE 100 closed 19 points higher at 6716.7 — a six and a half year high — while the FTSE 250 added 113.9 to 11922.9.
The Dow Jones Industrial Average edged higher when trading opened, despite US retail sales figures showing their biggest monthly decline in nearly two years in June. Traders said the figures showed that consumer confidence was being hit by a number of factors, including higher oil prices and the subprime mortgage lending problems, which could prompt the Federal Reserve to consider cutting US interest rates.
The news pushed sterling to a 26-year high against the dollar.
Back in the UK, hedge fund manager Man Group added another 17p to 633.5p on further consideration of its upbeat annual meeting statement yesterday, while property group Quintain Estates rose 40.5p to 895.5p on takeover hopes. Mortgage bank HBOS has just bought a stake of 11.898% in the company from Rock Investments, the vehicle of property investor Paul Kemsley.
Another property firm, Marylebone Warwick Balfour, added 15p to 278p as it said it had started talks over a possible sale of its Malmaison and Hotel du Vin businesses.
Marketing group Aegis rose 5.5p to 141.5p on news it had won the European media buying account for US consumer group Johnson & Johnson. UBS also issued a positive note on the business, saying: "We think the other major ad agencies — WPP, Publicis and Havas — would be very interested in acquiring Aegis. We estimate WPP and Publicis could afford to pay up to £2, with even Havas affording this figure if it can tie up with a partner such as WPP.
"While £2 represents a near 50% premium to the current share price, we think management may be tempted by recent digital transactions to push for a higher sale price, especially as they are aware of the strategic importance of Aegis to both WPP and Publicis. A sum of the parts valuation for Aegis could be high as 235p or more."
But B&Q owner Kingfisher slipped 1.25p to 223.5p as JP Morgan cut its price target from 300p to 285p, although the bank kept its overweight rating. Also today came news that B&Q is suing a Chinese firm for defamation and breach of contract.
Miners were mixed after the excitement yesterday over Rio Tinto's $38bn bid for Alcan. Rio fell 80p to £37.30 while BHP Billiton — which some traders believe could bid for Alcan's losing bidder Alcoa — dropped 27p to £15.27. But Vedanta Resources added 30p to £18.30.
In what is becoming a new tradition, there was a late Friday afternoon profit warning from support services group Carter & Carter which sent its shares crashing 214p to 52p, an 80% drop. Two weeks ago the company — whose founder and chief executive Phillip Carter was killed in a helicopter crash in May — issued a pessimistic trading update half an hour before the market closed for the weekend. Today the statement came at 4.14 pm, saying the company had failed in winning 15 contracts it had bid for in the government's Pathways to Work programme. On top of that, performance from its construction training programme was worse than expected at the time of the June announcement, its apprenticeship business was producing a lower level of achievers than hoped, and the takeup under the Train to Gain programme was behind expectations.
It said as a result profits for the year would be £10.5m, down from the £15.5m predicted two weeks ago, and it was in the process of renegotiating its bank facilities.
Also in for a heavy fall was Aim-listed Renewable Power & Light, which slumped 75.75p to 38.75p after it said it would make a loss for the year rather than the expected $25m profit. It blamed its difficulties on losing out on supplies of palm oil, which would have fuelled its power plants. It is suing the US supplier, Safari, for breach of contract for failing to deliver the palm oil at the agreed price, after prices rose on world markets since the contract was agreed.
The company's shares were suspended last week when news of the palm oil problem emerged.
"Clearly this is terrible news for RPL," said Ambrian Research. "But the wider repercussions for the industry could also be damaging. Biofuel producers will need to read the small print of contracts to see if their suppliers can default on deliveries due to the rapid rise in feedstocks.
"It certainly adds credence to companies like D1 Oils, which is working on a plantation to refinery model."
D1 however was also hit by the news, down 7.5p to 277.25p.
Telecoms minnow Pipex fell 0.5p to 12.75p. Italy's Tiscali has bought the company's broadband assets for £210m. Traders said this could be bad news for Cable & Wireless, which provide network services to Pipex, since Tiscali has its own network. But C&W issued a statement saying: "We're very happy to confirm that the contract we had with Pipex remains in place under the new Tiscali ownership."
C&W shares added 2.1p to 194.5p.
NXT, the specialist in flat panel loudspeakers, slipped 1.25p to 13.25p after raising £500,000 via convertible loan notes and warning of a shortfall in projected sales growth.
TV production company RDF Media fell 1p to 255.5p. In a trading statement last week it was puffing its documentaries including the one where "the Queen and the royal household will be observed over a year in a five part series for BBC 1."
Sadly the headlines today were more about the gaffe over the Queen storming or not storming out of a photo shoot with Anne Leibovitz, a sequence from a promotional tape for the RDF film which lead to an apology to the Royals from the BBC.
Finally consultancy group Wyatt was suspended at 22p, up 3p, awaiting news of an earnings-enhancing reverse takeover, as reported here.