London close: Rally falls short

The FTSE 100 briefly made it into positive territory in the afternoon session but that only lured out more sellers and the blue-chip index closed slightly down on the day.

Shares in Next remained in the doghouse all day, not so much because of the performance in the first half of its financial year but because of its cautious stance on prospects for the rest of the year.

The fashion retailer has noticed a 'cooling' in consumers' demand in recent months, but still expects profits this year to rise by between 6-11%, in line with its previous forecasts. 'We believe that consumer spending will be more restrained in the second half than in the first, as spending cuts and tax rises begin to take effect,' the high street giant said.

Part-nationalised lender Lloyds Banking Group provided some cheer, however. The bank is very much back in the black after posting a profit of £1.6bn for the first half of 2010, twice as much as some analysts had forecast. The bank, which lost almost £4bn this time last year and is still 41%-owned by the government, added that total impairments more than halved to £6.55bn from £13.4bn a year ago.

Elsewhere in the sector Standard Chartered got hammered even though pre-tax profit improved 10% year on year. In line with market expectations operating income was modestly lower at $7,924m compared to $7,960m in the first half of last year, but was up 10% from $7,224m in the second half of 2009.

Speciality pharmaceuticals group Shire has upgraded its full year earnings expectations after seeing a jump in revenues in the second quarter, but that did not prevent the shares from retiring to their sick bed,

The company, which is behind the hyperactivity treatment Vyvanse and the bowel disease drug Lialda, saw total revenues climb by 35% from the same period the previous year to $849m. Shire now sees earnings for the full year coming in at $4 per ADS (American Depositary Share), a 15% increase on 2009, and up from previous expectations of about $3.80.

Insurance giant Legal & General (L&G) topped market expectations with its interim figures and has rewarded shareholders with a 20% hike in the dividend. European Embedded Value (EEV) operating profit in the first half of 2010 was £589m, down from £656m the year before but ahead of most broker forecasts.

Santander's UK arm has confirmed the acquisition of more than 300 branches from Royal Bank of Scotland for £1.65bn, slightly less than expected. The deal will catapult Santander UK into the number two slot in UK retail banking. It already owns Abbey, Alliance & Leicester and Bradford & Bingley. Today's acquisition will see it take over 311 RBS branches in England and Wales and seven NatWest branches in Scotland.

It's looking like BP may have sealed the leaking Maconda well in the Gulf of Mexico by pumping it full of mud from vessels on the surface - a process known as "static kill". The procedure started at 9pm UK time on Tuesday and continued for the next eight hours. The well now "appears to have reached a static condition", BP said this morning.

Production volumes at Kazakhstan-based miner Eurasian Natural Resources Corporation (ENRC) are running above 2008 levels with the company operating flat out.

The recovery in property values has slowed in recent months, British Land said today, though investment for prime office and retail properties remains strong.

British Airways said 3.21 million passengers flew with the airline in July, a drop of 0.4% from the same month last year.

In the FTSE 250, shares in Salamander Energy have taken a big knock. The oil explorer has been hit with a double dose of bad news as it has had to restate reserves for the Kambuna field, offshore North Sumatra Indonesia, while a well in Lao PDR turned up dry.

Sales fell at Carpetright during the first quarter, forcing the carpet and flooring retailer to take another close look at costs and spending. Like for like sales in the UK and Ireland dropped 3.4% in the 13 weeks ended 31 July compared with a 1.4% increase this time last year. The decline accelerated to 4.2% in the rest of Europe from 3.1% last time.

Engineer and ceramics group Cookson moved back into the black in the first half of the year and said it expects second half profit to exceed the first half. For the half year ended June 30 Cookson posted a pre-tax profit of £92.5m compared to a loss of £89.7m the year before. Revenue increased to £1.23bn from £929m previously.

Premier Foods warned that a surge in wheat prices in the past month means second half profit at its Hovis division is unlikely to match levels seen in 2009. 'With the competitive marketplace and rising wheat costs, which have in recent weeks begun to escalate, it is unlikely that the division's second half profit will match its 2009 profit level as this period last year particularly benefited from wheat price deflation,' the group said in a statement.

Interactive learning technology specialist Promethean World has won a public schools contract in the USA. The contract is to provide its ActivBoard +2 interactive display systems to Albuquerque Public Schools in New Mexico .

Good weather rather than the World Cup is credited for a recent uptick at pub group and brewer Marston's. Like-for-like, Marston's Inns and Taverns, the managed pubs division, increased sales by 1.7% in the 43 weeks to end July. The tenanted business, Marston's Pub Company, saw like-for-like profits fall 4%, a slight improvement on the 4.5% decline reported in the results in May.

Price comparison website Moneysupermarket.com reported a jump in first half pre-tax profit and said it is well placed to make further progress going forward. Pre-tax profit in the six months to 30 June climbed to £2.9m from £1.9m a year earlier.

Soft drinks group Nichols saw profits climb by 39% in the half year to June 30 as sales stayed strong despite uncertain economic conditions .

Workforce and compliance optimisation solutions developer Allocate Software announced record results for the for the fourth year in a row in the year to the end of May.

Shares in Forbidden Technologies surged after the internet video streaming firm announced that Renegade Pictures is using its video platform FORscene for the production of its fourth series of BBC 3 series 'Don't Tell The Bride'.

FTSE 100 - Risers
Lloyds Banking Group (LLOY) 74.49p +3.57%
Randgold Resources (RRS) 5,715.00p +2.88%
African Barrick Gold (ABG) 558.50p +2.85%
Fresnillo (FRES) 1,098.00p +2.62%
Eurasian Natural Resources (ENRC) 962.50p +2.45%
Amec (AMEC) 915.00p +2.06%
Petrofac Ltd. (PFC) 1,325.00p +2.00%
Unilever (ULVR) 1,834.00p +1.78%
Pearson (PSON) 1,018.00p +1.50%
Wolseley (WOS) 1,484.00p +1.50%

FTSE 100 - Fallers
Next (NXT) 2,027.00p -7.82%
Standard Chartered (STAN) 1,807.00p -5.02%
Home Retail Group (HOME) 235.70p -3.60%
Kingfisher (KGF) 216.60p -3.22%
Inmarsat (ISAT) 722.50p -3.02%
Shire Plc (SHP) 1,429.00p -2.99%
Marks & Spencer Group (MKS) 350.20p -2.88%
British Land Co (BLND) 458.00p -2.45%
Aviva (AV.) 367.90p -2.28%
ICAP (IAP) 403.90p -1.97%