The Daily Mail's Geoff Foster on yeserday's trade

TROUBLED food retailer

Bill Grimsey took over as chief executive a year ago when Malcolm Walker resigned after investor fury at his sale of £13.5m of shares a few weeks before the first of three profit warnings. Grimsey needs to reduce debt, currently £425m, and to raise cash to revitalise the struggling chain.

Christmas proved a big disappointment as shoppers shunned it for bigger rivals. Like-for-like sales at its supermarket arm dropped 4.2%. In September, Iceland said retail sales had stabilised, but since then the business has gone backwards. Bears roared on THursday that sales might be down 10% since Christmas.

Grimsey turned round UK do-it-yourself chain Wickes and Parkn-Shop, a leading Hong Kong supermarket, before leaving both. He is finding Iceland a harder nut to crack. If he does not win City support for a fundraising, analysts fear he could walk away, leaving Iceland up the creek without a paddle.

On the other side of the High Street, Britain's largest discount retailer Matalan jumped 18p to 376 3/4p. It fell almost 18% last year, but management has moved quickly to reassure investors that 2002 should prove much better.

New chief executive Paul Mason, who replaced Angus Monro when he resigned in April, this week met analysts and institutional shareholders including Fidelity Investments and Jupiter. The meetings were apparently upbeat, with Mason stressing that there is an opportunity to increase sales by improving availability and quality. Broker UBS Warburg was suitably impressed and has upgraded from hold to buy. It raised its target price from 350p to 410p.

Mail order and Burberry retail giant Great Universal Stores gained 32 1/2p to 661 1/2p on talk of a pending bullish circular.

A classic bear squeeze following Wall Street's overnight recovery of 144 points helped the Footsie jump 87.1 points. It closed 75.5 higher at 5164.8.

Dealers were relieved to hear the Fed say, as it kept US interest rates on hold at 1.75%, that the world's largest economy is beginning to recover from recession. Wall Street rose a further 76 points in early trading. Sterling fell to $1.4120 against a strong dollar. The euro fell to 60.85p and 85.95 US cents.

Business services group Hays advanced 6p to 193p following regulator Postcomm's decision to open up the UK postal market to full competition for the first time.

Struggling advertising agency Cordiant rallied 6p to 81p after dealers heard that Harris Associates, run by vocal fund manager David Herro who used to tangle with the Saatchis, had acquired a further 2m shares, increasing its holding to 9.2%.

Following Wedneday's late profits warning and the resignation of chief executive Steve Rosier and finance director Bob Templeman, housebuilder Prowting had its shares demolished. They were sold down to 107p before closing 24 1/2p lower at 118p. Dealers believe chairman Richard Fraser, a former chief executive of rival Westbury, will turn the company around or a bidder will pounce.

Almost 20m shares in online auctioneer QXL Ricardo changed hands and the close was 0.2p firmer at 2.8p. Word is that Tuesday's third-quarter figures will make pleasant reading.

Aim-listed recruitment company Fairplace Consulting , 6p better at 119 1/2p, sees plenty of growth in the months ahead as City job cuts continue. First-half revenues surged 41% to a record £2.66m, helping it to recover from a pre-tax loss of £247,000 last time to £275,000 profit. The dividend is raised from 1.7p to 2p.