Yesterday's trading: Another rodeo ride for dealers

 

Disgruntled dealers didn't know whether they were on foot or horseback as share prices see-sawed throughout another nervy session.

Uncertainty continues to grip markets as bears roar their warning of the growing risk of another hefty sell-off before the end of the third quarter.

Worries about a mountain of £56bn-worth of commercial paper which is up for refinancing over the next week, coupled with today's anniversary of 9/11, meant fund managers were averse to chasing any blue and more inclined to unload lines of stock.

The day had started surprisingly well as Goldman Sachs and Deutsche Bank both said a 50% basis point cut in US interest rates next Tuesday is likely, following Friday's shock news that the US lost 4,000 jobs in August.

The data heightened fears that the world's biggest economy is facing a recession, although Morgan Stanley's in-form strategist Teun Draaisma doesn't think so.

He said: 'We do not think the odds of a recession have risen much as a result of one release of the notoriously volatile payroll numbers.'

Bob Diamond, the president of Barclays Capital, gave everyone a lift by saying the investment banking unit of Barclays (2½p easier at 580p) had traded profitably last month, with year-to-date profits being well ahead of 2006.

There were mood swings on Wall Street when the dicky Dow replaced an opening 84-point gain with a loss of 91, before rallying to close 14 points up. Up 40.9 points at 2pm, the Footsie closed 57.1 points down at 6,134.1. The FTSE 250 lost 132.9 points to 10,974.8.

Asset manager Invesco led the retreat at 557p, down 21½p, amid talk of a pending

bearish circular. Worries about the deteriorating US housing market sparked selling of plumbing giant Wolseley, 35p lower at 928p. Properties remained friendless with Hammerson closing 40p off at 1182p and British Land 38p down at 1187p.

Segro, the former Slough Estates, dropped 12p to 499½p and looks in grave danger of relegation from the Footsie tomorrow. Power station Drax shed 11p more to 621½p and is definitely staring the FTSE 250 in the face. Water company Kelda, also ready to walk the plank, rallied 13p to 852p on revived takeover gossip.

Primed for promotion are housebuilding giant Taylor Wimpey, 3¼p easier at 328¾p, and oil explorer Tullow Oil, 7p down at 550p.

Hopes that boss Michael Grade will dazzle analysts with his strategy presentation tomorrow helped ITV rise 2.2p to 111.3p. Advertising revenues are said to be improving, helped by exclusive Rugby World Cup coverage.

Smiths Group rose 6p to 981p, as Morgan Stanley upgraded it to equal weight from underweight and lifted its target price to £11 from £10.

Happy as Larry about continuing volatile trading conditions, spreadbetting giant IG Group jumped 15¾p to 352¾p. Goldman Sachs is a big fan and has raised its target price to 460p from 402p.

Former dotcom darling BATM Advanced Communications edged up ¼p to 33½p on strong interims.

Buying in response to a recommendation on our Investment Extra page on Saturday saw Ceres Power steam ahead and touch 318p before closing 28¼p better at 304p. The company has invented a gas boiler that simultaneously meets 90% of domestic electricity needs.

Cancer therapeutic company ValiRx jumped 3p to 16½p after achieving positive preclinical results for its GeneICE cancer treatment. It is now looking for partners to take it through the clinical trials process.

An upbeat trading statement at its coal projects in South Africa helped GVM Metals advance 2p to 39½p.

Griffin Mining sparkled at 116p, up 7p, following excellent drilling results from exploration activities at its Caijiaying zinc mine in China. Collins Stewart's target price is 138p.

Probability, the UK-focused mobile phone gambling specialist, rose 3p to 56½p after signing an agreement with Rank (2¾p dearer at 170p) to provide a range of white label games for mobiles, including roulette and blackjack, branded under the Blue Square trade name, which has circa 320,000 customers.

I-Mate firmed 2¼p to 51¾p after launching two new products at Dubai's GITEX trade fair that allow users to present Microsoft Office applications and videos directly from their Windows mobile device onto a display.

• Recruitment company Servoca, the former Multi Group, eased ½p to 38p but should soon attract buyers.

Rumours suggest an earnings-enhancing acquisition is in the pipeline soon, which could prompt a re-rating.

Last month the company bought Windsor Recruitment from Vantis Group for £1.37m cash. Results are due next month.