Signs of Consumer Life Across the Pond
Confidence in the UK economy took a blow after it failed to emerge from a recession in the third quarter.
But an indication from a retail bellwether that consumer demand may be picking up brought cash into consumer stock on the London stock Exchange Wednesday.
Marks & Spencer , which sells products ranking from clothes to household products to food, reported a first-half operating profit of 298.3 million pounds ($491.3 million), topping expectations of earning of 285 million pounds.
Shares of M&S rose more than 5 percent at the start of trading to make it one of the leaders on the FTSE-100. In addition, retailers such as fashion chains Next and Burberry , supermarket J. Sainsbury and Home Retail Group also rose.
But top retailer Tesco bucked the trend, slipping a day after Goldman Sachs upgraded the stock.
Other than the numbers, the enthusiasm could have come from M&S Chairman Stuart Rose, who said the worst of the downturn is over, according to Reuters.
But investors should note that the company stressed consumer confidence is still uncertain.
While demand has improved over the last six months, next year there will be a higher valued added tax, higher direct taxes and higher unemployment, M&S Finance Director Ian Dyson told CNBC.
"Demand remains fragile," Dyson said.