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Wall Street: Red carpet rolled out for cinema operator AMC’s debut; Ford slumps

Last updated: 09:13 18 Dec 2013 EST, First published: 10:13 18 Dec 2013 EST

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American cinema operator AMC Entertainment made a premium start to life on the New York Stock Exchange as its shares jumped 8% in the first deals.

The chain priced its IPO at $18 a share but it was trading at $19.42 within minutes. 

The company opted to float at the lower end of its $18-20 a share guidance but it is already changing hands for nearly the top end of that range.

The float raised $314mln with the funds earmarked for paying down debt.

AMC is controlled by China’s Dalian Wanda, which is led by the Asian superpower’s richest man, Wang Jianlin.

Wanda bought AMC for $2.6bn last year and it is planning on keeping an 80% stake.

The S&P 500 edged higher in early deals to 1,783, not far off its annual and all-time highs from the start of the month. The Dow Jones meanwhile was up 0.3% at 15,927.

All eyes are on the Federal Reserve as the market waits on a decision on whether to taper the US’s economic stimulus measures.

Opinion is divided among those who expect some action today and those that see tapering being postponed for another six months.

Shares of Ford fell more than 5% after it warned earnings would be below its previous expectations.

The company said pre-tax earnings for 2013 would be $8.5bn with profit the following year of between $7bn and $8bn.

Engine recalls cost Ford $300mln and dragged down margins to between 9.5% and 10%.

FedEx shares recovered from an early tumble after the parcel delivery giant’s second quarter earnings missed expectations.

UK Markets

The FTSE 100 was up 17.5 points to 6,503 after yesterday’s retreat as London also kept a finger on the Fed’s pulse.

Traders are positioning themselves ahead of any possible decision as it will come after the UK market close.

There was also UK unemployment data out, which showed an unexpected fall to 7.4% in the three months to October - the lowest level since 2009.

The biggest loser on the top flight was Marks & Spencer (LON:MKS), which lost 2.9%.

The group had earlier been the subject of a note from Swiss broker UBS, which has downgraded it along with ASOS (LON:ASC).

Both have been cut to 'neutral' from 'buy' as pressure on incomes, income, weak footfall and warmer October weather has continued to mean selling at lower rather than full prices.

UBS analyst Andrew Hughes said the economics of "selling more volumes at a lower price" was not something, which was working out in the retailers' favour.

The biggest gainer was Centrica (LON:CNA), which added 3.15% to its  share price as investors bought on following news that it was selling its Texas gas-fired power stations. The deal with Blackstone is worth US$685mln in cash.

In the junior market, things were also picking up with FTSE AIM 100 up 5.58 points and FTSE AIM All share adding 1.44.

Among the small cap risers was Tertiary Minerals (LON:TYM), which said results from the latest phase of drilling at its MB fluorspar project in Nevada had confirmed the potential for an open-pit mine.

Results from the first 10 holes drilled in the Southern Area showed thick zones intersected between surface and the maximum depth of drilling (125m), with all holes ending in mineralisation, which remains open in all directions. Shares were up over 3%. 

Other gainers were Petro Matad (LON:MATD), up 15%, and Stratex International (LON:STI).

The latter reported more encouraging results from early stage exploration for gold at Dalafin in Senegal.

The data, generated from a follow-up diamond and reverse circulation drill (RC) programme of the Faré South prospect, showed bumper grades of more 86 grammes a ton over seven metres in one hole, while other drilling holes found mineralisation consistently over short widths.

Shares in Empyrean Energy (LON:EME) edged higher today.

It came as it tempered expectations among investors clarifying that it has not yet received a drill schedule from Marathon Oil, the operator of the Sugarloaf project.

In response to a statement from Australian oil firm AWE, a fellow Sugarloaf stakeholder, which refers to a 100 to 110 well drill programme at the project in 2014, said that Marathon had only provided indicative guidance that it may drill that number of wells.


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