FTSE lacks impetus

The plethora of mixed corporate earnings this morning has resulted in a fairly choppy early session today.

Despite a higher opening for the UK benchmark, the market has anchored itself around the 6600 level and seems loath to make a break through the recent 6660 highs. Early evidence suggests that market participants will have to tolerate a lower close for the first time in five weeks. And with a light economic calendar today, one has to question what catalyst needs to materialise if we are to see a higher weekly close on the FTSE 100.
The costs of investing in new products led Pearson to report that adjusted earnings were down 26% in the first half of the year, with operating profit falling £137m. However, investors are focusing on the sales aspect, which beat expectations and rose 5% to £2.8bn. The shares are up 6.71% on the day.

Rolls-Royce Group is contending with a bout of profit-taking following its surge to a brand new high yesterday. It has fallen 3.35% on the day, as Deutsche Bank and Soc Gen trip over themselves to downgrade price targets for the UK-based company.

Despite better-than-expected earnings from BSkyB and the announcement of a stock buyback, the share is out of favour this morning, falling 2.09%. The impending launch of sports TV channels from rival BT is perhaps sending the more cautious investors for the exits.

The French CAC is outperforming the broader European indices, owing to a better-than-expected consumer confidence number as well as signs of progression in the merger and acquisition arena.

The University of Michigan sentiment figure is due out later this afternoon. Consensus is for a marginally higher reading this month of 84, against last month’s 83.9.

The Dow has given up some of yesterday’s gains, with the futures pointing to a lower opening of 15,541.

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