Tesco settles in US, Severn Trent squeezes savings

London open

The FTSE 100 is expected to continue to rise for a second day, with City traders expecting the index to open 10 points higher.

Stocks to watch

Tesco has paid $12m to settle one of two class action lawsuits brought by disgruntled US investors who sued over the overstatement of the grocer's 2014 first-half profits. The class action in question was made in New York against the company and certain of its former directors but the settlement agreement will, subject to confirmation by a federal court in New York, settle the class action with no admission of liability, with Tesco denying wrongdoing.

Some serious efficiency savings have seen profit rise on flat revenues at Severn Trent. Turnover at the FTSE 100-listed water utility was down marginally year-on-year, sitting at £896.1m (-0.2%), while profit before interest and tax was up 2.6% on an underlying basis to £281m.

The good news is flowing from the tap at Marston’s, after the brewer posted a 7% growth in underlying group revenue to £845.5m, which helped boost profit before tax by 10% to £91.5m. The company saw profit growth in all its trading areas, as it raised £70m from disposing of a number of lower-end pubs which no longer have a sustainable future.

Newspaper round-up

Mud from a BHP Billiton dam that burst at an iron ore mine in Brazil earlier this month, killing 12 people and polluting an important river, is toxic, the United Nations’ human rights agency has said. The statement contradicts claims by Samarco, the mine operator at the site of the rupture, that the water and mineral waste contained by the dam are not toxic. Citing “new evidence”, the UN’s office of the high commissioner for human rights said in a statement the residue “contained high levels of toxic heavy metals and other toxic chemicals”. – Guardian

The cost of High Speed 2 has risen to more than £55bn, although the controversial rail link between London and the North is one of a host of projects set to share in a 50% increase of investment in transport infrastructure. Capital spending is to surge to £61bn over the course of the parliament. Money will be spent on schemes including the electrification of the TransPennine, Midland and Great Western lines, almost £5bn for road maintenance and £250m to fix potholes. - Telegraph

The UK could build one of the world's first small modular nuclear reactors in the 2020s, after ministers announced support for the technology through a £250m research package. A competition to identify the "best value small modular reactor design for the UK" will be launched in the new year, which will "pave the way towards building one of the world’s first small modular reactors in the UK in the 2020s", the Treasury said. - Telegraph

Lloyds Banking Group will give details today of 1,000 job cuts as part of its drive to reduce its costs. The redundancies are part of the 9,000 roles that, in October last year, Lloyds said it would eliminate, alongside the closure of 200 branches, to take account of more customers using internet banking. Just over 2,300 of those jobs have gone so far. – The Times

US close

US traders had a plethora of economic data to digest on Wednesday ahead of the Thanksgiving holiday.

The Dow Jones Industrial Average ended 1.2 points up to 17,813.39, while the S&P 500 finished down 0.27 points to 2,088.87 and the Nasdaq closed 13.33 points higher at 5,116.14.

With Wall Street closed on Thursday and trading closing at 1pm Eastern Time on Friday (1800 GMT), investors had plenty to analyse.