No let-up for clubs as Sunderland takes a drubbing
Friday 01 August 1997
Shares in Sunderland dropped 10p to a fresh low of 337.5p, many a mile removed from the 760p peak reached soon after the club floated on the stock market on Christmas Eve.
The attack on Sunderland was spearheaded by analysts as they returned to their desks yesterday after the previous night's trip to watch the inaugural game at the club's new pounds 15m and evangelically named Stadium of Light.
Some questioned whether the 40,000-seater stadium was anything more than a white elephant, particularly in the light of the club's relegation from the money-spinning Premier League to the First Division. The lacklustre performance on the pitch on Wednesday night rekindled fears that the club may have to open up its cheque book to sign more players.
Newcastle, though, managed to make headway yesterday, scoring a 3.5p rise to 124p.
More than pounds 12m was wiped off the company's value on Monday in reaction to the news of Shearer's injury.
Footsie, like Sunderland, was lacking energy yesterday, getting pulled all over the park by Wall Street and sterling. The pound firmly reclaimed the DM3 threshold, putting pressure once again on leading exporters and manufacturers.
Although Wall Street opened on a firm note - following favourable news on the economy - the Dow Jones swiftly headed into negative territory after a Chicago PMI report knocked confidence. Footsie, up 14 points in early trading, closed 19.9 points lower at 4907.5.
Dixons, however, motored to another all-time high. The shares climbed 12p to close at 607.5p, making a two-day gain of 36p in response to the Government's ban on recommended retail prices in the electrical goods market which, investors believe, could benefit electrical retailers.
Encouraging noises from a host of brokers - SBC Warburg, Morgan Stanley and Societe Generale among them - also boosted Dixons.
Kingfisher, owner of the Comet chain, climbed with Dixons to finish 17.5p higher at 720p, not far off its year's high of 750.5p.
Next - looking smart after the success of its summer sales - added 22p to close at 759.5p; and Marks & Spencer joined in the fun, improving 12.5p to end at 589p.
Oil-related stocks also made slick progress, with Lasmo one of the star blue chips of the day, up 10.5p to 279p.
The company's steady-as-she-goes interim results - showing a 75 per cent exploration strike rate and a 16 per cent increase in cash flow - impressed the likes of Merrill Lynch, and pushed the shares to a year-high.
Shell nudged up 2p to close at 450.5p, partly aided by an "add" note from NatWest Securities.
NatWest also recommended BP, which added 1.5p at one point but gave up the ghost later in the day and closed unchanged at 834.5p.
Oils, though, were not altogether in the pink as Dresdner Kleinwort Benson downgraded the sector from "overweight" to "neutral".
Investors in pharmaceuticals stocks tasted a somewhat bitter pill as Glaxo Wellcome's shares ended lower over worries on profit margins.
Although Glaxo's shares pushed 2p higher in early trading after releasing first half results that were largely in line with expectations, analysts said they had concerns about margins and the expiry of patents on the Zovirax and Zantac drugs. The shares closed 38p down at pounds 12.91.
SmithKline Beecham followed Glaxo's downward spiral, shedding 28p to pounds 11.89. Zeneca did little better, and was caught in the slipstream to finish 7p off at pounds 20.21.
British Telecom was in the doldrums - down 4p to 426.5p - after Kleinwort advised investors to sell amid renewed worries about the MCI merger.
Meanwhile, Logica's pounds 51m acquisition of Aldiscon, a supplier of network systems to mobile phone operators, met with a favourable reaction, Logica's shares zooming up 60p to 750p.
Other notable risers included Headlam Group, which gained 13p to 313.5p after its pounds 30.1m purchase of MCD on Wednesday.
Tradepoint jumped 5p to 85p after announcing that over pounds 1bn worth of shares have been traded on its electronic exchange since it was launched.
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