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LONDON (Thomson Financial) - UK blue chips closed firmer today, near the late session peak, as Chancellor Alistair Darling's first UK Pre-Budget report passed without incidence, while Wall Street pushed ahead on the latest FOMC minutes, and Northern Rock jumped again amid ongoing rescue bid hopes.
At the close, the FTSE 100 index was 74.5 points firmer at 6,615.4, just off the day's high of 6,625.3, having recovered from an early low of 6,527.5.
All the broader FTSE indices ended higher, with the FTSE 250 index up 99.1 points at 11,4127.3.
Volume was a touch below average, however, with 2.972 bln shares changing hands in 597,066 deals.
The DJIA was 33.40 points firmer by London's close at 14,077.10, while the S&P 500 index was 4.20 points higher at 1,556.80, and the Nasdaq composite index gained 5.12 points at 2,792.49, all back near to opening highs.
US investors were looking ahead to the start of the US third-quarter earnings season today, with numbers due after the close from aluminium producer Alcoa, and ahead of the release of minutes from the Federal Reserve Open Market committee's last meeting, due at 7.00 pm BST.
Jimmy Yates, trader at CMC Markets noted that with a 'growing consensus that the Fed won't rush through another rate cut, anything that affirms this position will suggest that the US economy remains some way from recession and this in turn should help further buoy the overall mood amongst equity traders'.
In London, Northern Rock was the biggest blue chip mover once again, up 34.2 pence to 206.7 -- a near 20 pct leap -- on hopes one of many interested private equity parties will launch a bid for the ailing mortgage lender.
The FT reported this morning that US buyout firm Lone Star has joined the growing list of potential bidders.
Sentiment in Northern Rock was also helped by news today that the existing UK government guarantee on its customer deposits has been extended to all retail deposits made after September 19.
Northern Rock's advance lifted sentiment in its blue chip mortgage peer Alliance & Leicester, up 13 pence to 786, and mid cap Bradford & Bingley ahead 6 pence at 276-1/4.
Barclays shares also pushed higher again, up 3-1/2 pence to 665-1/2 after it announced a resumption of its share buyback programme which suggested there were no sub-prime lending holes in its books.
A raft of positive broker comment also supported the shares, with Deutsche Bank resuming coverage with a 'buy' stance, while WestLB upped its rating on the bank to 'hold' from 'reduce', and Hichens Harrison also upgrading to 'add' from 'hold'.
British Land was a late afternoon feature, adding 55 pence at 1,147 amid speculation of stake building by a sovereign Saudi investor.
The rumours boosted peers Hammerson, up 51 pence to 1,196, Land Securities up 43 pence at 1,693, and Liberty International up 33 pence at 1,178.
SABMiller gained 21 pence at 1,487 on news that the firm is creating a 10 bln usd joint US venture with Molson Coors.
The deal between the second and third biggest brewers in the US will create 500 mln usd of annual cost synergies.
The sector consolidation move and ongoing rumour mill saw SABMiller's brewing peer Scottish & Newcastle add 15-1/2 pence at 637-1/2.
Water firms benefited from news that a Challenger Financial Services Group led-consortium has acquired peer UK water and sewerage company Southern Water Capital for 4.195 bln stg.
In reaction, Severn Trent gained 33 pence at 1,4766, Scottish & Southern Energy took on 37 pence at 1,515, and United Utilities firmed 11-1/2 pence at 725-1/2.
Meanwhile heavyweight mining issues were mixed today.
On the upside, shares in BHP Billiton added 54 pence at 1,765, Xstrata gained 97 pence at 3,309, and Rio Tinto firmed 67 pence at 4,235 as UBS raised its prices estimates for iron ore and other commodities in a sector review today.
The broker also hiked its target price for BHP Billiton to 2,250 pence from 1,800 and for Xstrata to 4,000 pence from 3,800, repeating 'buy' ratings on both stocks.
Kazakhmys shares shed 39 pence at 1,463 after UBS cut its rating to 'sell' from 'neutral', mainly on valuation grounds, with its target left unchanged at 1,500 pence.
Antofagasta lost 7 pence at 803-1/2 after SG Securities initiated coverage on the copper miner with a 'sell' rating and a 730 pence price target.
And on the second line Randgold Resources shed 20 pence at 1,552 after HSBC cut its stance to 'neutral' from 'overweight'.
HSBC pointed out that gold equities have moved to a premium, with rising costs and appreciating currencies set to constrain September earnings.
Wolseley lost 18-1/2 pence at 855 after Citigroup reportedly placed 9 mln shares in the plumbing group at 837 pence each.
J Sainsbury shares dropped 4-1/2 pence at 579-1/2 after the FT reported that the Sainsbury family may derail the Delta Two bid over pensions funding.
SG Securities also downgraded its stance on Sainsburys to 'hold' from 'buy' today with a maintained target of 600 pence.
Housebuilders were also out of favour as UBS downgraded the European construction sector to 'neutral' from 'overweight' and reduced price targets across the board.
In reaction, housebuilder Persimmon shed 25 pence at 1,015, with Barratt Developments down 9-1/2 pence at 740, while among the mid caps Redrow dropped 15-1/2 pence at 397-1/2 after being downgraded to 'sell' from 'neutral' in the UBS sector review.
Elsewhere among the second line fallers, defence manufacturer Chemring Group dropped 90 pence lower to 1,874 on news the company is investigating a reported explosion at its Simmel Difesa munitions factory near the Italian capital Rome, in which police said one worker died and several people were injured.
JKX Oil & Gas shed 2-3/4 pence at 365 on news it is plugging and abandoning the Golitza-1 exploration well, onshore Bulgaria as drilling has indicated that all three objective horizons in the Jurassic and Triassi do not bear hydrocarbons.
Burren Energy shares jumped 258 pence higher to 1,180 after the firm revealed it has rejected a number of takeover approaches, including one from Italian oil and gas giant Eni, that valued the UK group at up to 1,100 pence a share.
The news excited other oil explorers, with blue chip Tullow Oil gaining 15 pence at 601, while among the mid caps Premier Oil firmed 85 pence at 1,120, and Dana Petroleum added 66 pence at 1,187.
LogicaCMG added 15-1/2 at 165-3/4 following news BT strategy chief Andy Green is to become its new CEO, with Landsbanki terming the move a 'strong appointment' and reiterating its 'buy' rating.
Carpetright shares gained 54 pence at 1,215 after a trading update and following its confirmation that chairman and chief executive Lord Harris has made a revised non-binding offer for the company. tf.TFN-Europe_newsdesk@thomson.com jmh/lht COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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