S&P 500 on a high as tech stocks shine


The S&P 500 is on course to close at a record high as US stocks opened on the front foot on Friday.

Tech stocks are dominating proceedings, not least because Twitter has set the price range for its eagerly-anticipated flotation.

The ubiquitous short messaging service, which has over 200mln members, plans to sell 70mln shares at between US$17 and US$20 to raise up to US$1.4bn, it said in a filing.

Trading updates after the market closed yesterday from software colossus Microsoft and online retailer Amazon have both elicited strong responses from the market.

Microsoft announced fiscal first quarter earnings per share (EPS) of 62 cents, comfortably above the 54 cents the market had been expecting.

The Devices & Consumer Hardware division was the stand-out performer with revenues up 37% year-on-year. The company ascribed the growth to Surface, its tablet computer offering. The company pioneered tablet computers back in 2002 but it took Apple, some eight years later, to galvanise the market with its iPad.

Microsoft’s first attempt to jump back into the tablet market with the Surface did not fare too well, but the new 32GB model of the Surface RT, powered by technology based on the intellectual property of ARM Holdings (LON:ARM) seems to be gaining some traction in the market, according to Microsoft.

Amazon revealed a third quarter loss per share of 9 cents, bang in line with expectations. Sales of US$17.09bn were up 24% from a year earlier and ahead of expectations of US$16.76bn.

The Dow Jones is up 38 (0.3%) at 15,548, the S&P 500 is up 4 (0.2%) at 1,756 while, not surprisingly, the tech-heavy NASDAQ Composite shows them both a clean pair of heels, rising 27 points (0.7%) to 3,956.

Britain’s blue chip index may not be about to close at an all-time high but it is, at present, keeping its head above 6,700, ambling 8 points (0.1%) higher to 6,721.

This is despite fears about demand from growing superpower China, the world’s largest importer of metals, which prompted mining shares to fall, with Vedanta Resources (LON:VED) hardest hit, down 2.2% to £10.64.

At the other end of the Footsie leader board, state-owned lender Royal Bank of Scotland (LON:RBS) is wanted on reports that the hiving off its Citizens Financial arm in the US could happen sooner than previously expected.

Outsourcers are in the news. Security specialist G4S (LON:GFS) is up 2.6% to 259.6p as rumours about a possible break-up of the security giant swirled around the City.

HSBC, which lifted its recommendation from ‘neutral’ to ‘sell’, sparked the speculation, saying: “Hopes that value can be unlocked through break-ups and a rejuvenated strategy are likely to buoy G4S’s stock through what is perceived as a rump of difficult trading.”

Private equity firm Charterhouse Capital is checking out the company’s cash solutions business, while activist hedge fund Cevian Capital has been buying into the firm to encourage it to sell off parts of the business.

Meanwhile, Serco (LON:SRP) is 1.1% higher at 558.5p after the chief executive officer Chris Hyman threw himself on top of a grenade, taking one for the team after the company found itself at the centre of an overcharging scandal.

The former FTSE 100 firm revealed the departure of chief executive Chris Hyman alongside plans to reorganise the company to make it more “transparent” as it strives to retain UK government business.

Hyman will be replaced in an acting capacity by Ed Casey, who has led Serco's Americas division since 2005. The company plans to look outside the business for a long-term successor.

Premier Oil (LON:PMO) was among the top mid-cap performers as its 15%-owned Rochelle field in the North Sea achieved ‘first gas’.

Despite Serco’s rally and Premier’s rise, the FTSE 250 is off 53 points at 15,474, with AZ Electronic Materials (LON:AZEM) acting as a drag, down 3.4%, after it was cut to ‘underperform’ by Credit Suisse.

As for the small caps, Antrim Energy (LON:AEY) jumped 14% to 7.12p as it confirmed the restart of oil production from the Causeway and Cormorant East fields in the North Sea.

This follows the completion of a routine phase of maintenance, which began in August but had overrun.

Additionally, Antrim also confirmed that production rates from Causeway are now expected to rise over the course of the year, due to the start-up of electrical submersible pumps and the use of water injection.

Prior to shut-down, Causeway was producing just shy of 3,000 barrels per day while Cormorant East, which came online earlier this year, produced 625 barrels per day in the first half of the year.

Antrim owns a 35.5% interest in Causeway and an 8.4% stake in Cormorant East (which is located in the Contender Area).
Industry sources also suggest Antrim is a possible takeover target for those looking to get a foothold off the coast of Ireland.

Seeing Machines (LON:SEE) rose 2.3% to 5.5p when it revealed Cliffs Natural Resources is to trial its driver safety technology, which monitors truck drivers’ fatigue levels.

Seeing Machines said the technology will be installed into six road trains for a 90 day fatigue assessment trial which, once completed, could see a larger scale rollout across the fleet. The value of this deployment is over A$150,000.

Nostra Terra (LON:NTOG) is wanted, up 9.1% at 0.36p, after it quashed speculation that a share placing is on the way. Emphasising the group’s cash position, chief executive Matt Lofgran said: "We previously announced that in January we had surpassed cash flow positive on an operational basis.

“This still remains the case, where free cash flow generated from production has been reinvested into additional wells throughout the year. Since that time we have also collected in excess of $1,400,000 from Richfield, and these funds will also be used for upcoming leasing and drilling."

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