Big-name stocks hold back FTSE

A flat start to trading hides the fact that the FTSE 100 is still struggling to break above 6840 and push on towards the all-time high.

The recent failed attempts at a break out of this level have been held back recently by one sector or another, and you get the feeling that a strong up-day all round is needed to light the fuse.

Today we have some big names holding the market down, with weakness seen in Vodafone (-0.6%) ahead of its key dividend vote next week. In addition, the big three FTSE 100 supermarkets are all seeing sellers, as JP Morgan pours cold water on the recent idea to split Morrisons' (-0.3%) supermarket business from its property portfolio. The pessimism extends to Sainsbury's (-0.7%) and Tesco (-0.3%) as well, with the suggestion that portfolio valuations are unrealistic and are being misconceived by the market. This is a space that we will watch closely. For Tesco, at least, a good part of the bull case in light of its January 2012 profit warning has been its hefty stock of bricks and mortar.

Elsewhere, a profit warning for publisher Pearson (-8%) gives it today’s wooden spoon, while some favourable broker comment pushes Marks and Spencer (+3.4%) back towards £5.

Slim beats on Markit flash PMI readings for Europe have helped the single currency find a bid and run up to recent resistance around $1.3640. France is still trying to claw its way back towards 50, despite today’s readings being greeted optimistically by traders. We would still expect to see sellers of the euro at these levels, and it has a little further to go to break the recent downward trend.

US markets will today look to earnings from McDonald's pre-market and Microsoft after hours. Both are Dow Jones components, so watch for moves in the futures around results time. Currently we are calling the Dow lower by 50 points at 16,320, following on from weak trading yesterday, as the Dow’s weightiest component IBM sat heavily on proceedings.

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