Kier gets 3-year extension to Highways England contract, underlying profit remains flat at Ocado

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The FTSE 100 is expected to open flat on Tuesday, having closed up 0.92% at 7,687.99 on Monday.

Stocks to watch

Tesco's UK and Ireland chief executive Charles Wilson is stepping down as he recovers from throat cancer, the company said on Monday. Wilson has been undergoing daily radiotherapy in recent months, the company said, adding that he has “responded very well” to the treatment. He will remain on the executive committee and will focus on the Booker wholesale business that Tesco bought earlier this year.

Infrastructure services provider Kier Group has secured three-year extensions on its Highways England contracts for Areas 3 and 9, with a total value of around £250m per annum, it confirmed on Tuesday. The FTSE 250 company said the contracts provided routine highway maintenance services, repairs to defects, emergency incident response services and severe weather services on the Highways England road network.

Ocado reported flat underlying operating profit in the first half of the year but the online grocery specialist said the second half was likely to be lower. Recently promoted to the FTSE 100 index, the group swung to a £9m loss before tax for the half-year to 3 June from a £17.7m profit a year ago.

Newspaper round-up

Britain’s retailers are benefiting from England’s continuing World Cup run and the warm weather boosting beer, barbecue and big-screen TV sales, despite the severe underlying challenges facing the high street. Suggesting deep problems remain for retailers as they close hundreds of stores across the country, the British Retail Consortium (BRC) and KPMG said World Cup fever sweeping the nation along with a heatwave helped paper over the cracks for the industry in June.- Guardian

Marks & Spencer is running out of Gareth Southgate’s trademark waistcoat prompting anguished protests from England fans. The waistcoat has become a cult fashion item since Southgate began wearing it at the start of England’s run to the world cup semi-final. It even has its own spoof Twitter account with the slogan “Fashion’s Coming Home”. - Telegraph

The takeover of a British aircraft component maker by a Chinese rival has collapsed, putting hundreds of jobs at risk. Better Capital, the listed venture capital fund owned by Jon Moulton, the financier, had been poised to sell Northern Aerospace to Shaanxi Ligeance Mineral Resources. However, the £44 million sale has fallen apart after a national security inquiry. - The Times

US close

Stocks finished Monday’s session higher in the US, with investor sentiment boosted by gains overnight on most Asian bourses ahead of the second quarter earnings season kicking off on Wall Street on Friday.

The Dow Jones Industrial Average finished ahead 1.31% at 24,776.59, the S&P 500 rose 0.88% to 2,784.17, and the Nasdaq 100 added 0.95% to 7,276.00.

Global banking giants Citi and JP Morgan were scheduled to update shareholders on Thursday in what analysts said might turn out to be another bumper quarter for company earnings, although some observers were instead highlighting that the second quarter might mark the peak in earnings growth for the current cycle.

According to the analyst consensus, S&P 500 firms' profits were forecast to grow by 20% year-on-year, just a tad below the 22% pace seen over the first three months of the year.

In a research note sent to clients on 3 July, strategists at Bank of America-Merrill Lynch told clients they forecast earnings per share would come in “modestly better” than analysts expected at 22% year-on-year.