Market report: Wednesday close

SHARES in

The cementless knee joints Profix II and Oxinium Genesis II have been literally letting patients down as they become loose. S&N is uncertain as to whether it is a problem with surgeons installing the knee joints or with the product. As a precaution, it has withdrawn them pending investigations. A spokesman said they represent 'less than 1% of the group's knee joint market'.

Share prices generally moved to their highest in more than a year, cheered by a strong performance overnight on Wall Street, where the Dow surged after the Federal Reserve pegged interest rates and indicated they would remain low. But London stocks failed to hold their best levels, with the FTSE 100 down 6 points at 4293 at the close.

British American Tobacco rose 11p to 644p. The gain reflected a surge in shares of the world's biggest tobacco producer, Philip Morris, in the US overnight. After the official close of business, the price jumped $4 to $44.68.

The Illinois Supreme Court agreed to hear Philip Morris's appeal against a $10.1bn (£6.4bn) verdict in a class-action lawsuit claiming the company misled smokers about the dangers of light cigarettes. The court also reduced the appeal bond the tobacco giant must post to about $6bn, rather than the $12bn set initially.

Philip Morris said the higher bond would drive it into bankruptcy and force it to default on a $206bn, 25-year nationwide tobacco settlement. The huge bond had damaged the credit rating of Philip Morris's parent company, Altria Group, and forced it to cancel a share buyback programme.

Tesco ran into profit-taking after Tuesday's better-than-expected interims, the price slipping 1 1/2p to 241p. Lehman Brothers has increased its 12-month target price by 10p to 260p and says the shares remain a core holding in anyone's portfolio.

Marks & Spencer rose 4 1/2p to 324 1/2p after Dresdner Kleinwort Wasserstein raised the shares from hold to add and increased its target price from 340p to 350p.

Liberty International fell 23 1/2p to 645p after launching a £240m convertible bond with a coupon of 3.65% to 3.95% a year at a convertible price of between 800p and 825p a share. The property specialist wants the money to fund its expansion programme.

Rail maintenance contractor Jarvis hit the buffers with a fall of 20p to 320p, wiping £27.6m from its stock value of £482m, following the furore over Tuesday's derailment at King's Cross. Jarvis has also been criticised for its role in the Potters Bar crash last year.

Defence and aerospace contractor Cobham was up 23 1/2p to 1241p as the City continued to reflect on Tuesday's results. UBS has raised its recommendation from neutral to buy and increased its target price from 1300p to 1450p.

Milk supplier Uniq, back above 200p for the first time in two years earlier this week, put on 6p at 208 1/2p. Broker Merrill Lynch has downgraded the shares from buy to neutral.