Market report: Tuesday close

THE City is expecting great things of Sir Martin Sorrell's advertising agency

The price rose a further 10 3/4p to an 18-month high of 581 1/2p with traders concluding the worst of the advertising slump may be over. Smith Barney has raised its rating from in-line to outperform and lifted its target price from 500p to 650p. A spokesman said: 'In the current bath-shaped advertising recession we believe the industry is now moving from the corrugated bottom to the beginnings of an upslope.'

The broker reckons WPP will be relatively upbeat. It expects Sorrell to confirm this view by taking a positive stance on current trading, in stark contrast to his previous comments on prospects.

Brokers generally are braced for yet another drop in WPP's profits from £210m to between £196m and £198m. The group recently bought close rival Cordiant, and is expected to receive a $60m (£38m) boost from the launch by drugs giant AstraZeneca of its fat-busting treatment Crestor. The one trouble spot will be in the US, where a weak dollar will have left a dent. WPP generates about 40% of its revenue in the lucrative American market.

Share prices traded in a narrow range, unable to glean much from a solid performance by the Dow overnight on Wall Street. In another day of thin trading, the FTSE 100 index closed down 21.3 points at 4250.8.

Mining giant BHP Billiton slipped 2p to 405p after Morgan Stanley cut its rating from overweight to equal weight as it reduced its stance on the mining sector to neutral. Instead, it favours rival Rio Tinto, up 23p at 1350p, which it has moved from equal weight to overweight and raised its price target by 1300p to 1400p. Elsewhere in the mining sector, Xstrata retreated 5 1/2p to 466p after Deutsche Bank cut its recommendation from buy to hold. The broker has lifted its price target from 471p to 500p.

Canary Wharf led second-liners higher with a jump of 16p to 252p. Goldman Sachs' real estate arm intends to join the list of bidders for the property company. JP Morgan says the shares are too high and doubts anyone would bid at this level.

Takeover hopes continued to buoy Crest Nicholson, but the shares later backtracked to trade unchanged at 318 1/2p. Gerald Ronson's Heron International has increased its holding in the housebuilder to 4.17%.

Financial Times publisher Pearson jumped 17 1/4p to 627 1/4p after broker Credit Suisse First Boston resumed coverage of the shares with an outperform rating and 700p price target.

Building support services group Mears continues to please its followers, adding a further 3 1/2p to a record high of 119p. Mail order specialist Access Plus says takeover talks announced in April are still on. Access jumped 19p to 165p, valuing the company at £29m. The shares touched 180p on news of the takeover talks.