1630 Close: The FTSE 100 ended up 19.78 points to 6871.00 as investors weighed US data including gross domestic product (GDP) and initial jobless claims. US GDP shrank by an annualised rate of 1% in the first quarter of 2014, according to revised estimates by the Department of Commerce today, representing the first quarterly contraction in three years. Analysts had expected the initial estimate of 0.1% growth to be revised lower to -0.5% following a 2.6% GDP expansion in the fourth quarter of 2013. Separately, initial weekly unemployment claims fell by 27,000 to reach 300,000 during the week ended May 24th, according to the US Department of Labor. The consensus estimate had been for a reading of 318,000.
1500: US pending home sales increased by 0.4 per cent month-on-month in April, a tad less than the one per cent forecast by consensus.
1423: In a note to clients today reiterating their 'buy' recommendation on shares
of Lloyds analysts at Oriel write, "so while TSB valuation expectations may be under pressure, which is likely to negatively impact book value forecasts, the disposal of TSB should be net interest margin enhancing for Lloyds, reflecting lower asset margins in the TSB book".
1335: US jobless claims have come in much lower than expected at 300,000 for the week to May 24th, down from a revised 327,000 the previous week and below the consensus forecast of 318,000.
1330: US GDP has been revised sharply lower to show a 1% contraction in the first quarter of 2014, compared with the 0.1% growth initially estimated. Analysts had expected the data to be revised to show just a 0.5% fall.
1138: Analysts at UBS have upgraded their view on IMI stock. "An organic sales compound annual growth rate (CAGR) of 3% over the last decade has not been impressive. However, we forecast a doubling of growth with an organic CAGR of 6.4% out to 2018," the broker said.
1137: The apparently low take up to the Treasury's Help-to-Buy scheme, as revealed in this morning's figures, "is far from trivial," according to Rob Wood, Chief Economist at Berenberg. "The indirect effects are much more important. Like an iceberg, the part visible above water grossly understates its true size. We expect the Bank of England to recommend watering down the scheme in its annual review in September," he adds.
1051: In reaction to the press speculation overnight Mitchells & Butlers confirmed that it has entered into exclusive discussions regarding the potential acquisition of a majority of the Orchid estate.
0950: Analysts at Numis believe that a purchase of a majority of the Orchid Pub company's estate by Mitchells&Butlers would be a good one. The mooted price is one which the firm could afford. As well, the excess cash on which it is sitting means that it can outbid private equity firms such as Colony Capital and Starwood Capital with the transaction still remaining strongly earnings enhancing. The broker's only concern is that the resultant capex commitment to the Orchid estate could be used as an excuse to further postpone a resumption in the dividend.
0929: A hypothetical merger between Smith&Nephew and Stryker would yield merger synergies of between 160-195p per share of the British orthopaedic equipment manufacturer, although substantial additional non-operational, purely financial gearing related benefits might also be achievable, analysts at Credit Suisse explain in a note to clients.
0831: Stocks have started the day higher despite the dip seen on Wall Street yesterday. To take note of, Barclays Research was out with a note overnight explaining to clients that the chances of (targeted) bank reserve ratio cuts in China are now greater. Smith&Nephew is at the top of the leader-board on the Footsie. Shares in the medical device maker saw a bout of volatility on Wednesday on reports - later denied - that US rival Stryker might be mulling a takeover. Weir Group is also advancing, after having been the object of positive coverage in The Times and the Financial Times' Lex column this morning, following its failed bid for Metso. A raft of US data is scheduled for release later in the day, including revised figures on first quarter GDP growth which may show that the economy contracted during the first three months of the year. FTSE 100 up 15 to 6,866.