Optimism on US edges FTSE higher

Hopes for further economy-boosting measures from the US Federal Reserve mounted today, sending the London market higher.

The FTSE 100 Index closed 14.8 points up at 5672.4 after expectations for more action from the Fed to stimulate the recovery emerged.

Dismal unemployment figures on Friday have been seen by markets as the green light for the Fed to try and rejuvenate the US economy with more quantitative easing at its next meeting in early November.

But any further asset purchase programme in the US would put more dollars into circulation and cause its value to decline.

Despite this negative sentiment, the pound fell against the greenback at 1.59. But sterling was up against the euro at 1.14.

Among Footsie stocks, blue-chip heavyweights BP, Prudential, Marks & Spencer and BT featured prominently on the fallers board after a slew of broker downgrades.

Prudential fell 8p to 628.5p after JP Morgan Cazenove downgraded the stock from neutral to underweight.

Bernstein Research also downgraded BT and cut its target price following a decent run for the stock, which stood 2.1p lower at 146.9p.

Other fallers included oil giant BP, which dropped 3.5p to 432.6p after Royal Bank of Scotland said investors should expect an initially conservative approach to dividends should the payouts return early next year.

Retailer Marks & Spencer fell 5.3p to 405.7p as HSBC worried about the trading outlook and said much of the good news found in last week's stronger than expected trading update was already factored into the share price.

Oil services group Petrofac led the market higher, after a lucrative contract win worth more than $250m (€180m).

The company announced it was to take over operational responsibility and facilities management of the Sajaa gas plant, in Sharjah, in the United Arab Emirates (UAE) in a five year deal. Shares closed 35p higher at 1428p.

In a quiet session for corporate news, easyJet was in focus after it announced a deal to end its long-running row with founder Stelios Haji-Ioannou and secure its use of the "easy" brand.

It will pay Haji-Ioannou 0.25% of its revenues each year, fixed at £3.9m (€4.46m) and £4.95m (€5.66m) for the first two years, plus another £300,000 (€343,440) annually. Shares closed 2.7p higher at 454.3p.

Other risers in the FTSE 250 Index included bookmakers Ladbrokes after it said operating profits more than doubled in the third quarter. It benefited from the tail-end of the World Cup and a more favourable run of results at the start of the English football season. Shares were 3.1p higher at 141.1p.

Wickes owner Travis Perkins fell 1% after it reported a 6% rise in turnover but said growth rates had slowed at its builders' merchant business in recent weeks. Shares were 9.5p lower at 854.5p.

Elsewhere, win-a-supercar firm Best of the Best slumped by nearly 50%, down 12.5p to 17p, after BAA ended the firm's contract to display cars at its airport terminals.

The biggest Footsie risers were Man Group up 6.6p at 257p, Petrofac ahead 35p at 1428p, Weir Group up 37p at 1580p and Schroders ahead 32p at 1488p.

The biggest Footsie fallers were Autonomy Corporation down 35p at 1485p, Reckitt Benckiser Group off 54p at 3403p, BT Group down 2.1p at 146.9p and Xstrata off 17.5p at 1278.5p.