Market report: Wednesday close

BP WAS being swept along by the Thundering Herd today, the shares climbing 11 1/2p to 448 1/2p on turnover of 46m. The Thundering Herd, Wall Street's nickname for broker Merrill Lynch, has decided to throw its weight behind the oil giant by upping its recommendation from neutral to buy with a price target of 520p.

Merrill's Mark Iannotti says BP is on the way up following last year's disastrous performance. It was impressed by recent second-quarter numbers and by the strength of the management. The story is coming together in terms of growth and profitability.

The shares have lost much of their premium rating compared with the European oil sector, are currently trading on nine times earnings and are regarded as low risk.

The bulls had the bit between their teeth in London where shares briefly hit a new closing high for the year. The FTSE 100 index sported a rise of 57.7 to 4245.7. The bulls look to the US and claim that the longawaited recovery there is under way. Overnight, the Dow surged 107 points and the S&P 500 index rose back above the 1020 support level, boosted by better-than-expected manufacturing output numbers. The Nasdaq Composite index is trading at a 17-month best. The Dow extended those gains in early trading this afternoon.

National Grid Transco slipped 5 1/2p to 382p as US securities house Morgan Stanley slashed its target price from 450p to 390p. It has also downgraded earnings numbers, blaming lower US profits. The group has been linked to power cuts that plunged London and the US eastern seaboard into darkness last month. Weekend reports suggest the group could face compensation claims ranging from £400m to £1bn from businesses affected by the power cuts.

International news agency and financial information supplier Reuters rose 1/2p to 255p despite US broker Lehman Brothers downgrading because it thought the shares, which have outperformed the wider market since April, were fully valued. Lehman has switched from overweight to equal weight and trimmed its target from 264p to 257p.

US broker Smith Barney has moved to an in-line recommendation on Allied Domecq, 3 1/2p better at 391 1/2p, following Monday's trading update. It has also raised its target price from 375p to 410p.

Retirement homes builder McCarthy & Stone rose 7 1/2p to 511p on the back of a bullish trading update. It predicts a 'highly satisfactory' set of results for the year. The group sold 1948 apartments, up from 1671 last year, and the average selling price rose from £112,000 to £131,000. Taylor Woodrow's proposed acquisition of rival housebuilder Wilson Connolly, unmoved on 233p, appears to have struck a chord. Smith Barney reckons it is a good deal and has lifted its target from 250p to 290p with an outperform rating. But Woodrow slid 5 1/4p to 251 3/4p.

Financier Nigel Wray has been topping up his holding in AIM-listed WILink, up 10p at 900p, where he is chairman. He has bought 5000 shares at 860p (£43,000), taking his stake to 520,465 shares or 19.1%. Software specialist Marlborough Stirling firmed 1/2p to 46p. Broker UBS has repeated its buy recommendation and raised its 12-month target from 50p to 55p. Trafficmaster rose 7 1/2p to 44 1/4p after landing a contract to supply Mazda Motors UK with its Smartnav road navigation device.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.