Morning all.

MARKET EXPECTATIONS

* mmO2 six months to September EBITDA 818 mln stg vs 621 mln; pretax profit 245 mln stg

* J Sainsbury six months to September underlying pretax profit 125-135 mln stg vs 366 mln; interim dividend 2.15 pence vs 4.30

MARKETS

FTSE 100 4,770.4 down 32.7

FTSE 250 6,558.0 down 34.5

DJIA 10,487.65 down 62.59

Nasdaq Comp 2,078.62 down 15.47

S&P 500 1,175.43 down 8.38

Tokyo: Nikkei closed at 11,131.29 down 30.46

Hang Seng midday 13,806.62 up 60.54

Gold 439.82 usd (436.42 usd)

Oil - Brent Dec 42.29 usd (43.04 usd)



BREAKING NEWS

* The board of Manchester United told Malcolm Glazer's family it was prepared to recommend its 300 pence per share offer in a letter sent to the US sports tycoon before last week's breakdown in relations between the camps - The FT

* ING is in talks to sell Baring Asset Management in two parts to Northern Trust and Massachusetts Mutual of the US- The FT

* A vital 3 bln usd pipeline designed by BP to help meet Britain's oil needs has been riddled with corrosion - The Guardian



PRESS COMMENT

FT

THE LEX COLUMN comments on VODAFONE (Vodafone's investors have long been fretting about more adventures on the acquisition trail. They seem to have won the day), UK RETAILING (For the UK food and general retailing sectors, which both trade on above market earnings multiples, this year's Christmas stockings look increasingly empty), INVESTOR INTENTIONS (In terms of global growth, 2004 will be a banner year. But investors already have their eyes fixed on the harder times to come), EUROPEAN CARS (Investors should expect further sector underperformance and consumers bigger incentives)

EXPRESS

WHO'S DEALING: MCCARTHY & STONE (chairman Keith Lovelock sold 150,000 shares at 590 pence. He retains a holdings of 426,543 shares) - SHARE WHISPER: TRAFFICMASTER (Bullish comments from Bridgewell Securities, dealers reckon more positive news regarding its Smartnav product is just round the corner) - BROKER'S VIEW: VIRGIN MOBILE (JP Morgan said it expects tomorrow's half year figures to reveal progress on profit margins)

Times

TEMPUS: BURBERRY (It is hard to see Burberry shares as anything but expensive. Sell), VT GROUP (The shipbuilding arm provides a thick layer of icing on the cake), NORTHERN FOODS (hold)

Telegraph

QUESTOR: EMAP (take the longer view and hold), TBI (its not cheap, but TBI could be one for those who buy into the break-up story), BUSINESS POST (A first class buying opportunity)

Independent

THE INVESTMENT COLUMN: BURBERRY (Dear but hold it for now), BRAMBLES (Keep buying for dividend growth), NORTHERN FOODS (Christmas will be vital, and no one knows how M&S, and hence, Northern, is going to fare. Wait for the new year to see if its health regime has kicked in. Avoid)

Guardian

ROYAL BANK OF SCOTLAND (Rumours that Banco Santander is set to place its remaining 2.54 pct stake), DERWENT VALLEY (talk of bid approach)

LLOYDS TSB DOWNGRADED TO 'IN-LINE' FROM 'OUTPERFORM' BY GOLDMAN SACHS

Morning all.

Shares in J Sainsbury PLC were reiterated 'in-line' by Goldman Sachs after the troubled retailer posted a 64 pct drop in interim profits - as expected, dealers said.
In response, Goldman said the interim results contained few surprises given that an underlying pretax figure of 125 mln to 135 mln had already been flagged and all of the strategic news had been covered in the Business Review.
In the event, underlying pretax declined 64 pct to 131 mln.
The broker said part of that was the result of the disposal of Shaw's but the main feature was a 51 pct decline in the underlying EBIT of the UK
supermarkets to 155 mln, or a 200 basis point decline in margin.

Morning all

Morning all. The Lloyds downgrade must have affected BARC as well.Down 5p atm.

Morning all. My Dixons were just gaining some of their loss - bad news today.

WOW, quiet in here today! Its like a library...

UK and European brokers' recommendations issued today, as collated by AFX News from a range of market sources.

WILLIAMS DE BROE
Upgrades to Buy from Hold Rank Group -- Downgrades to Hold from Buy Enterprise Inns -- Downgrades to Hold from Buy Greene King -- Downgrades to Sell from Hold Wolves & Dudley

CSFB
Downgrades to Neutral from Outperform IMI, 400 pence target

CITIGROUP SMITH BARNEY
Upgrades to Buy from Hold BNL

MERRILL LYNCH
Reiterates Buy Old Mutual, raises target to 135 pence from 120 -- Downgrades to Sell from Neutral H&M -- Downgrades to Neutral from Buy Schroders -- Downgrades to Sell from Neutral Jardine Lloyd Thompson -- Neutral Dexia

CHEUVREUX
Downgrades to Underperform from Outperform Sandvik -- Starts Intercontinental Hotels as Outperform, 834 pence target - Upgrades to Outperform Crest Nicholson

UBS
Downgrades to Neutral from Buy BAA -- Buy BASF, raises target to 59 from 55

TEATHER & GREENWOOD
Downgrades to Hold from Buy Dixons -- Downgrades to Buy from Strong Buy Carillion

EVOLUTION
Downgrades to Add from Buy Dixons

MORGAN STANLEY
Upgrades to Overweight Scottish & Southern -- Downgrades to Equalweight from Overweight Scottish Power -- Downgrades to Equalweight from Overweight Fielmann -- Reiterates Overweight Sogecable, cuts price target to 35 eur vs 39

PANMURE GORDON
Downgrades to Sell from Hold Dixons -- Semiconductors; Buy Arc International, Buy CSR, Sell Wolfson, Upgrades to Buy from Hold ARM -- Downgrades to Hold from Buy Aegis

LEHMAN BROTHERS
Downgrades to Underweight from Equalweight Unilever -- Upgrades to Equalweight from Underweight Cadbury Schweppes -- Underweight L'Oreal cuts target to 52 eur from 56, Overweight Danone, Overweight Reckitt Benckiser -- Underweight Siemens, 60 eur target, raises estimates

ING
Downgrades to Hold from Buy Portugal Telecom

GOLDMAN SACHS
In Line Emap, cuts estimates -- Outperform Punch Taverns, Punch Taverns, raises estimates -- Outperform Vodafone, cuts estimates -- Downgrades to In Line from Outperform Lloyds TSB -- Downgrades to Underperform from In Line Standard Chartered

DEUTSCHE BANK
Reiterates Buy French Connection, cuts target to 300 from 440 -- Buy Voest Alpine, raises target to 67 eur from 57 -- Hold VT Group, raises target to 280 pence from 270 -- Buy MFI, 135 pence target

ABN AMRO
Downgrades to Reduce from Hold L'Oreal

Exciting day!