Friday morning business bulletin

Jun 13 2008 By Andrew Mernin

The performance of banking shares provided a crumb of comfort for investors during an otherwise downbeat end to the week in London today.

The FTSE 100 Index was 54.3 points lower at 5736.2 in the first hour of trading, with the mood soured by a late sell-off on Wall Street.

Stronger-than-expected retail sales figures meant the Dow Jones Industrial Average ended in positive territory - up 0.5% - but the performance was short of the level seen at the time of London’s close yesterday afternoon.

The biggest fallers came from the financial services sector, with Prudential down 15p at 623.5p and London Stock Exchange off 33.5p at 868.5p.

Banks bucked the trend after European firm UBS got its rights issue away with strong investor support. That provided encouragement for HBOS, which rose further away from its 275p rights issue price following a gain 17.5p to 300.5p.

Alliance & Leicester benefited from the improved mood with a jump of 9.75p to 315.25p, while Barclays edged ahead 1.25p to 316p.

Department store chain John Lewis ended its run of falling sales today by reporting a 2.1% jump in revenues for the week to last Saturday.

John Lewis said the increase, which followed four weeks of negative sales growth, was ``particularly pleasing" in the current economic climate. The haul for the week of £46.1m was also 11% higher than two years ago.

The chain was helped by the first full week of trading at its relocated store in Liverpool, while three outlets - Edinburgh, Kingston and Oxford Street - improved sales on a year earlier. Johnlewis.com lifted sales by 28.6%.

The weekly trading figures from John Lewis have attracted close attention in recent weeks given the insight they offer into UK consumer spending.

Seymour Pierce research analyst Freddie George said John Lewis was helped last week by better weather and easier comparatives with a year earlier.

Moss Bros reported a deterioration in sales today, but said it was well placed to limit any further downside from the current testing conditions.

The menswear retailer, which announced losses of £1.4m in April, said like-for-like sales dipped 1.5% in the first 19 weeks of the current financial year, although this was offset by tighter stock levels.

Sales were up 0.9% in the first nine weeks of the year, meaning trading is likely to have dropped 3.4% in the intervening 10 weeks.

Chief executive Philip Mountford said: ``The men’s retail market continues to be extremely challenging but management believes the business is well set up to navigate this difficult period.

``As the UK’s No 1 branded suit specialist with a wide range of fashionable suit collections, we are well differentiated from our competitors."

The pound at 9am was US$1.9453 compared to US$1.9465 at the previous close while the euro at 9am was £0.7921  compared to £0.7922 at the previous close.