Market Report: Pearson rallies on relief it will not bid for Dow

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Shares in the publishing group Pearson may have rallied 11.5p to 836p on the back of relief that it will not now bid for Dow Jones, but analysts are far from unanimous in believing that the shares will continue to perform strongly.

Panmure Gordon reiterated its "sell" advice with a 740p price target, telling clients that The Wall Street Journal could become a much tougher global competitor to the Financial Times under Rupert Murdoch's ownership. Although the broker expected the rally after the company decided not to go ahead with an offer, it remains bearish on prospects. Not so at UBS, as the Swiss bank told clients to keep buying Pearson shares and to concentrate on its educational publishing business, which the broker believes could be worth up to 1,230p on its own.

Centrica continues to attract solid support and the usual dose of takeover speculation, despite the weaker market. The broker Citigroup expects the company to report a bullish trading update on Monday and is looking for confirmation that first-quarter trading has been strong, especially in the UK residential business. The shares rallied 6p to 385.5p as Citi upped its target to 415p.

It has been a while since the last dose of hedge-fund hysteria swept the markets, but so far the collapse of a Bear Stearns-run sub- prime mortgage fund is creating little more than a ripple. Barclays, rumoured to have £300m of exposure to the fund, fell 9p to 719.5p. Meanwhile, Royal Bank of Scotland, Barclays' main rival in the bidding war for ABN Amro, fell 6p to 635p.

London shares ended the week in lacklustre form, with little direction from the US or Asian markets overnight. With few reasons to take new positions ahead of the weekend and many City desks deserted with traders enjoying the last two days of Ascot, the FTSE 100 drifted 28.6 lower to 6,567.4.

There was more buzz around mid-cap property stocks after a big sell-off on Thursday. Quintain Estates was bid 22.5p higher to 799.5p as more bid talk did the rounds. The name widely linked with a bid is Paul Kemsley, one of Sir Alan Sugar's interviewers in The Apprentice and the owner of Rock Property. Mr Kemsley once tried to buy Countrywide, the estate agency bought by Apollo Management earlier this year for more than £1bn.

News of an Office of Fair Trading investigation into the house-building industry had little impact on share prices as most traders shrugged off the possibility of any major implications. One trader said: "It is far too early to make any conclusions, and given the need for new homes it is unlikely that being told to build houses faster is going to make any dents in sector profits. Quite the contrary, in fact."

Persimmon closed just 4p worse at 1,203p ahead of Monday's first-half numbers, withBarratt Developments, unchanged at 1,005p, and Berkeley Group, also reporting next week, 14p better at 1,780p.

For someone who reportedly shuns the media spotlight, Mike Ashley hasn't half courted controversy since his SportsDirect chain listed in March. Not content with buying a stake in Adidas, delivering a profit warning on his main business and buying Newcastle United, he is now attempting to oust the entire board of Blacks Leisure, in which SportsDirect has a 29.4 per cent stake, over the proposed sale of its Freespirit brand. Shares in Blacks soared 55p to 330p as investors took it as a sign that a full bid could be the end result. Other sports retailers have been in the doldrums of late - John David Group tanked 36.25p to 489.25p while JJB Sports closed half a penny worse at 252p.

The communications and public relations provider Adventis Group got a boost as it revealed further contract wins. Among its new clients is SPMSD, a joint venture between the European pharmaceutical giants Sanofi Pasteur and Merck. The news helped Adventis add 1.5p to 55.75p and reversed a recent bout of profit-taking that had seen the stock lose more than 24 per cent of its value in the past two months.

Stratic Energy, a Canadian mining group that listed on AIM and the Toronto TSX index on Thursday following its acquisition of the AIM-listed Grove Energy, found plenty of support. Although volume was not heavy, there was little sign of any sellers and the stock closed 6.25p better at 55.75p.

Traders are hoping to hear some good news next week from the mining minnow Cambridge Mineral Resources. Although the shares were unchanged at 3.12p, the word in the market is a bullish update on its South American activities is in the pipeline. Traders expect it to drum up decent support on the back of the update.

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