Market overview: S&P downgrades Tesco

1630:Close The Footsie ended the session lower ahead of this weekend’s ECB stress tests and after an initial feint lower in US stocks. Significantly, on Friday ECB president Mario Draghi sounded a clarion call to action, warning leaders from the European Union that a "joint effort" is required to avoid a "relapse into recession." Tullow continued to reel under the pressure of low oil prices but Pearson did worst on the top flight index after announcing that its CFO was leaving. Intercontinental Hotels Group was also to be seen lower following reports overnight of an Ebola infection in NY. Heading the other way was Shire. The firm updated investors on its third quarter results. Tesco managed to hold on to the nearest level of technical support at 168p – at least for now. FTSE 100 down 30 to 6,388.7.

1550: Ratings agency S&P has downgraded Tesco's long-term credit ratings to BBB-. S&P cited lower profitability and negative expectations for like-for-like sales growth in the UK for the financial years 2015 and 2016 as the main factors behind the decision. The decision comes only a day after Fitch Ratings and Moody's both downgraded Tesco by a notch.

1500: US new home sales edged higher by 0.2% month-on-month in September to reach an annualised rate of 467,000, according to the Department of Commerce. The consensus forecast had been for 470,000. September’s reading was 17% above the year-ago figure. Significantly, the previous month’s estimate was revised sharply downwards, to reveal 466,000.

1201: Shire reports 60% increase in third quarter earnings per share to $2.93.

1130: Following last night's announcement by Pfizer that it has authorised a new share buy-back programme worth $11bn analysts at Citi have reportedly told clients that it does not lower the probability of a new bid for AstraZeneca.

1102: There are only very tentative signs of a modest growth slowdown in the data, UniCredit Research economist Daniel Vernazza explained to clients in an e-mailed note following the announcement. Nevertheless, the broker does expect to see a little bit of a further slowdown in the fourth quarter, to an 0.6% quarter-on-quarter pace, “as the economy fights off a number of external headwinds”.

1023: UK stocks have pared losses slightly after the UK GDP data, though losses from travel stocks and continued selling pressure at Tesco limits upside. Analysts at Espirito Santo, Deutsche Bank and JPMorgan have all cut their target prices for Tesco's shares today after yesterday's poorly-received first-half results. The FTSE 100 is down 23 points at 6,396, but above its intraday low of 6,374.

0930: UK GDP grew 0.7% in the third quarter, as expected.

0915: Commenting on this morning’s figures out from Pearson analysts at Westhouse Securities wrote: “As detailed in our recent initiation note we regard PSON as a quality company […] That said, we remain cautious on the short-term challenges facing the company, disruption in several of its key markets and on the execution risk entailed in its deep rooted transition into a digital learning company.”

0854: Stocks are wavering a tad at the start of trading after news broke overnight of a case of Ebola in New York. Analysts however are stressing that it is not a case of contagion but rather of a healthcare worker recently returned from travels in Africa. To take note of, Shanghai and Tokyo stocks have finished in the blue today. Tesco is at the bottom of the pile once again, with some rather poor coverage in this morning’s Lex column surely not helping matters any. The current price-earnings multiple of the shares is not attractive, Lex reasons. Shire is due to publish its results later in the morning. BskyB and ITV are on the up. Third quarter GDP estimates are set for release this morning by ONS. Market commentary is also focusing on this coming weekend’s European bank ‘stress test’ results. FTSE 100 down 36 to 6,383.