FTSE makes steady progress after fall in unemployment

Investors gave a cautious welcome to a fall in unemployment today as shares in London made steady progress.

The FTSE 100 Index was up 18.5 points to 6174.9 by mid-morning after the number of people out of work fell by 7,000 in the three months to October.

But there was less good news for Alliance & Leicester which fell 2% despite saying that annual profits would be at the top end of expectations.

Shares in Alliance were off 20p to 1091p after Collins Stewart gave the stock a “sell” rating, arguing that revenue generation remains weak.

It was followed down the fallers’ board by Severn Trent after the water firm went ex-dividend, meaning that investors are no longer entitled to the latest results pay-out. The shares fell 19p to 1450p.

And Cadbury Schweppes was off 1.5p to 541p after a downgrade from Cazenove, which said there were better money-making opportunities elsewhere in the sector.

Going in the other direction was sugar and sweetener maker Tate & Lyle, which lifted nearly 4% or 28.5p to 815.5p as traders speculated that it may next week announce higher margins on its US drinks contracts in 2007.

The Footsie risers board was also notable for the presence of retailer Next, which was up 28p at 1793p, even though a trading update from Debenhams yesterday heightened worries about prospects in the sector. In the FTSE 250 Index, Debenhams gained 0.5p to 183.5p after a fall of 1% yesterday.

Engineering group Amec turned around early losses to gain 12.25p to 437.5p, or 3%, after new chief executive Samir Brikho unveiled details of his strategy review. He will sell some businesses, but also warned profits for this year would be £15 million below board expectations.

Investors were less enthused by an update from Bunzl, which bought packaging firm Keenpac and said trading for the full year would be in line with expectations. Shares fell more than 4% or 29.5p to 645p.