Barclays Share News (BARC)

LONDON (Alliance News) - Stocks in London are trading higher midday Wednesday, driven by individual company news on another busy day in the UK interim earnings season, while US stock futures trade higher ahead of an interest rate decision and policy announcement by the US Federal Reserve.

The Fed statement, which is expected at 1900 BST, could provide more insight about the timing of the Fed's first rate hike since June 2006. While no changes to rates are expected in this statement, with the US economy showing signs of progress and labour market providing sustained improvement, markets are pricing in a US rate hike as early as September.

Fed Chair Janet Yellen, as well as her colleagues, have repeatedly said that a rate hike likely will occur this year, though depending upon the progress shown by the US economy and labour market.

Economists at Nomura say they expect the policy-setting Federal Open Market Committee to modestly upgrade its characterization of the US economy and labour market in light of the recent declines in unemployment. However, they expect no changes in the statement's policy language.

"Data released since the June FOMC meeting have been mixed and growth has yet to accelerate to the pace seen in the middle of last year. Based on our outlook and that of the FOMC's, we expect the Committee to raise rates by the end of the year," Nomura analysts say. "But we do not believe the data received so far guarantees a September liftoff; as such, we do not expect the FOMC to signal in its statement that the first rate hike will occur in September."

US futures point Wall Street higher ahead of the open with social media companies in focus. Twitter said on Tuesday after the US market close that its second quarter net loss narrowed from the year-ago quarter, while its adjusted earnings-per-share topped the Street view. Revenue improved 61% and came above the consensus estimate. The company forecast third quarter revenue in line with estimates and raised the low end of its full year 2015 revenue guidance.

Reporting on Wednesday is social-media rival Facebook, along with MasterCard, Whole Foods Market, and Humana, amongst others.

Futures point the DJIA, S&P 500 and the Nasdaq 100 up 0.2%.

In London, the FTSE 100 trades up 0.5% at 6,586.87, the FTSE 250 is up 0.3% at 17,433.69, and the AIM All-Share is up 0.1% at 750.17.

In Europe, the French CAC 40 is up 0.3% and the German DAX 30 is up 0.1%.

Another flurry of individual stock news has been the main focus of attention for investors in London ahead of the Fed decision.

Compass Group is the biggest decliner in the FTSE 100, trading down 4.0%. The catering services and outsourcing company said sales growth in the third quarter was slightly slower than for the rest of the year, but said it is having a strong year overall, though it will book some restructuring charges related to its offshore and remote business.

Compass said it is in the process of reducing the cost base for its offshore and remote business and expects to book incremental restructuring costs of GBP20 million to GBP25 million a year for its 2015 and 2016 financial year. Thanks to those costs, Compass expects its full-year operating margin in 2015 will be broadly flat year-on-year.

Also trading lower is Antofagasta, down 2.1%. The miner said it has lowered its full year copper production guidance and said its cash costs will rise in the second half of 2015 after it delayed the start of production from its new Antucoya mine in Chile. The company has delayed the start of production at the Antucoya mine, also in Chile, until the end of the third quarter of 2015, which will hit its costs and production guidance for the full year.

British American Tobacco is one of the biggest blue-chip gainers up 3.0%. The tobacco company reported growth in profit in the first half of 2015, although revenue was hit by adverse currency movements, but BAT said it remains confident it will deliver an improved performance in the second half.

BAT posted a rise in pretax profit in the six months to June 30 to GBP3.5 billion from GBP2.6 billion, as revenue grew 2.4% at constant rates to GBP7 billion from GBP6.8 billion, but declined 5.9% to GBP6.4 billion at current rates. It said that revenue was driven by good pricing, but was hit by adverse exchange movements.

Barclays, up 1.8%, reported a jump in second-quarter net profit, as newly appointed Executive Chairman John McFarlane said the bank intends to pay a flat dividend for 2015 and wants to intensify efforts to cut risky assets in its non-core division.

Net profit increased to GBP1.15 billion in the quarter ended June 30, compared with GBP161 million in the corresponding period the prior year. The numbers included a GBP496 million gain on assets acquired from failed investment bank Lehman Brothers in 2008 and provisions of GBP850 million for customer compensation in the UK, among other charges.

Adjusted pretax profit, a closely watched measure of the bank's performance, increased to GBP1.85 billion in the quarter, up from GBP1.66 billion year-on-year, and ahead of the GBP1.75 billion forecast by analysts.

Foxtons Group leads the midcap gainers up 8.1%, after the estate agency said it expects to meet market expectations for its full year. Foxtons posted a pretax profit of GBP18.1 million for the half year to end-June, down from GBP23.1 million a year before, as revenue fell to GBP71.1 million from GBP72.8 million and administrative costs rose to GBP53.0 million from GBP49.8 million as a result of an increase in the company's branch network.

Premier Farnell is the worst FTSE 250 performer, down 17%. The technology products and services company warned it now expects its adjusted operating profit for its first half to be down 10% compared to the previous year, hit by slowing sales, challenging market conditions and the continued weakness of the euro. As a result it now expects full-year adjusted operating profit to be down around 6% compared to the previous year.

In the AIM All-Share index, Image Scan Holdings' shares are up 52% after it secured a grant from the UK government's Innovate UK body and said it has secured a technology licence deal with IBEX Innovations Ltd.

Meanwhile, Global Invacom Group is down 21% after the satellite equipment company said it expects to swing to a net loss in the first half. The Singapore-based company said it expects to post a net loss of USD2.5 million to USD3.0 million for the six months to the end of June, compared to the USD4.3 million profit it posted a year earlier.

Alongside the Fed interest rate decision, still in the economic calendar are US pending home sales due at 1500 BST, while US Energy Information Administration crude oil stocks are at 1530 BST.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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