London afternoon: No sign of rally yet

Expectations of a weak start on Wall Street have put the kybosh on any hopes of a recovery in London over the lunch time session, after leading shares endured a tough morning in the wake of downbeat statements from the Federal Reserve (last night) and the Bank of England (this morning).The Bank of England lowered its forecasts for economic growth in 2011 while raising inflation expectations. The Bank is now predicting economic growth of 2.5% in 2011, down from a previous forecast of 3.4%. He predicted that inflation would remain above the 2% target for much of next year.A few blue-chips defy the trend and make headway today. Smiths Group leads the small band of risers as speculation about a break-up continues to simmer, while Holiday Inn owner InterContinental Hotels recoups some of the losses it sustained followed yesterday's trading update, after Panmure Gordon upgraded the stock to "buy" from "hold". Broker comment also supports drinks brands owner Diageo; Barclays Capital has lifted its rating on the Guinness brewer to "equal weight" from "underperform".Hot on the heels of TUI Travel's slump yesterday, package tour operator Thomas Cook has warned that full-year profits will be at the low end of forecasts due to softer UK bookings and the weak euro. "As we enter the final quarter, it is apparent that trading in the UK business is softer than expected and, at current rates, the recent weakening of the euro will have an adverse impact on translation of our euro-based earnings," said chief executive Manny Fontenla-Novoa.Standard Life has increased half-year profit in line with forecasts as a big increase in net inflows boosted assets under management. IFRS operating profit before tax from continuing operations rose 10% to £182m and European Embedded Value (EEV) profit grew 11% to £364m. Net inflows soared 71% to a record £5.3bn. Panmure Gordon called the results a good set of figures but said they "could see the gap to our target price narrow further, and we are downgrading from 'Buy' to 'Hold'."The investment banking business of Barclays is preparing to sack several hundred staff in reaction to a sharp downturn in activity during the second quarter. Back office and administration jobs at Barclays Capital (BarCap) are most likely to disappear, people close to the action have said. Private equity group 3i said the assets in its portfolio continue to perform well operationally and financially, generating good income. Dividends and interest received in the first quarter to 30 June resulted in a cash inflow of £15.2 million.Speciality pharmaceuticals group Shire has agreed to sell its attention deficit hyperactivity disorder (ADHD) treatment Daytrana to Noven Pharmaceuticals.First half profits rose at support services group and building contractor Balfour Beatty despite lower revenues at its core construction businesses. Pre-tax profits rose to £81m from £65m in the half year to June on revenues of £4.6bn, up from £4.39bn as US acquisition Parsons Brinckerhoff kicked in strongly.Legacy software specialist Micro Focus has slumped after it slashed its sales forecasts for this year after a sluggish first quarter and slow licence sales, though earnings guidance is unchanged.Property repair and maintenance company Rok has suspended its CFO with immediate effect after 'serious failings' at its Plumbing Heating & Electrical business, which will bring underlying pre-tax profit for the year significantly below market expectations. Residential property firm Grainger is trading well, despite slowing house price growth in the last few months. The group said £49.4m of residential sales were completed during the four month period to 31 July 2010, taking total sales in the ten months to 31 July to £128.4m. Embattled social housing firm Connaught is the best performer in the second-tier, up by around a third on the day but still down 95% over the last year. The rally has been written off as a "bear squeeze" by traders.Nautical Petroleum has raised £30.35m from a placing to help fund its planned exploration, appraisal and pre-development activity until the end of 2011, including work on the potentially lucrative Catcher field in the UK Central North Sea.Flowers and gifts retailer Flying Brands has cheered investors with half-year profit in line with expectations and the resumption of dividend payments.Healthcare group Nestor admitted today it has rejected an unsolicited bid approach worth 90p a share in cash from the owners of the AA and Saga. The possible offer, which valued the business at £102m, was made by Acromas Holdings Limited.Energy and mineral investor Xtract Energy has had to stop production at the Sarikiz-2 well operated by its Turkish business Extrem Energy after suffering problems with the pump.Consumer and motor finance provider S & U traded in line with expectations in the six months to 31 July 2010.IT firm Triad said it continues to be affected by uncertainty in levels of client spending, particularly in the public sector. 'Efforts to strengthen the group's customer base continue and we have seen some signs of improvement in activity in the private sector ,' the company said.Shares in public sector consultant Tribal jumped after it reacted to 'recent press speculation' by confirming that it has 'received preliminary expressions of interest which may or may not lead to an offer being made for the company.'The company has, like Triad, been affected by uncertainty over public sector spending, but reiterated that it thinks it will benefit from the government's penny-pinching measures.