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Market report: Friday close

NEW YORK Attorney General Eliot Spitzer's attack on insurer Marsh & McLennan has left the rest of the insurance industry in a state of shock.

Spitzer is accusing M&M of receiving bribes or illegal commission in exchange for giving business. He alleges M&M last year received $800m (£445m) in illegal commission, the equivalent of half its overall profits.

Lloyd's of London insurance brokers felt the shockwaves from across the Pond, Benfield falling 7 1/2p to 255 1/2p and Jardine Lloyd Thompson shedding 4 3/4p to 440p, making them two of the biggest losers among second-liners.

Broker Numis Securities has dropped Benfield from reduce to sell and Jardine from hold to sell. It warns the investigation will overhang the sector for a considerable time and prevent any consolidation. Numis does not believe Benfield or Jardine Lloyd Thompson has been approached by the Attorney General's office in the US, but it is likely a similar investigation in the UK will follow.

A record price for oil of $54.58 a barrel was reached overnight, leaving Wall Street sharply lower. In London, investors were also scurrying for cover as the FTSE 100 index nursed a fall of 6.7 to 4622.7.

Lehman Brothers has raised its fourth quarter forecast for Brent crude from $38 to $48 a barrel. That is not what the likes of British Airways, down 3p at 206p and Ryanair, 3 cents lower at €3.70, with their big fuel bills want to hear.

Premier Foods slipped 3 1/2p to 227 3/4p after Hicks, Muse, Tate & Furst sold almost 50m shares, or 20.4% of the company. Merrill Lynch and JP Morgan carried out the sale via an accelerated book-building exercise at around 220p.

Cable & Wireless held above 100p with a drop of 1/4p to 100 1/4p after US securities house Goldman Sachs told clients trading at the telecoms group will remain difficult over the next year.

It has cut its recommendation from in-line to underperform and reduced its earnings forecast, before tax, interest and other charges, for 2005 by almost 9% to £507m and for the year after by nearly 12% to £570m. Broker Credit Suisse First Boston has repeated its short-term neutral rating despite cutting its forecast for earnings.

Manchester United rose 21p to 285p after Malcolm Glazer's bid for the club apparently collapsed. However, long after the market closed it was announced that Glazer had, in fact, boosted his stake to 25.5%.

Just a couple of days after broker Merrill Lynch recommended Wood Group to clients, rival UBS has downgraded the oil industry services group from neutral to reduce. UBS has a 12-month target of 130p. The price retreated 6 1/2p to 145 1/4p.

Housebuilder Countryside Properties fell 4 1/2p to 269p after completing the sale of 915 new homes. Just a few weeks ago, when the company issued a profits warning, the target had been 950.

Cash-strapped Argonaut Games was suspended at 3.12p pending clarification of its financial position.

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Munich
Ted Kennedy