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FTSE up as M&S surges higher

The FTSE 100 is rising yet again this morning, with Marks & Spencer surging 8% after its first uptick in profits in four years.

M&S logo
Source: Bloomberg

Despite yet another down day for the mining sector, the FTSE has added around 30 points in the morning session so far, helped along the way by a few surprises from an M&S statement that most had expected would be uniformly dreary. Sales were down 2.3% in the first-half of the year, meaning that it has fallen for thirteen quarters in a row, but the rise in underlying profits and a symbolic increase in the dividend was enough to send the shares higher.

However, M&S still looks like a disjointed business, with the food division continuing to cover for poor performance in clothing. With more ‘Simply Food’ stores on the way, questions will be asked about how long M&S should continue bothering with its clothing lines and simply focus on realising shareholder value in its food division.

In a similar vein, there was continued buying of Associated British Foods after results yesterday, although here it is the clothing arm that is compensating for disappointing performance in sugar, while bargain hunters were out in force in Tullow Oil, pushing the share price 2.7% higher.

ADP numbers, a speech from Federal Reserve dissenter Narayana Kocherlakota and services PMI data are all on the calendar today, providing something of a warmup to the heavyweight news later in the week.

While the Dow Jones has managed to eke out some more gains from Friday’s high, the S&P 500 remains becalmed below 2020, a sign that markets have run out of bullish catalysts to push them higher. A weaker ADP figure could see Wall Street emulate markets this side of the Atlantic, which have slowly begun to lose their grip on the highs seen at the end of last week. Ahead of the open, we expect the Dow to start 25 points higher at 17,408.

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