City propelled into positive territory by hopes in US

The FTSE 100 Index closed 14.79 points up at 5672.40 after expectations for more action from the Fed to stimulate the recovery emerged.

Dismal unemployment figures on Friday have been seen by markets as the green light for the Fed to try and rejuvenate the US economy with more quantitative easing at its next meeting in early November.

But any further asset purchase programme in the US would put more dollars into circulation and cause its value to decline.

Despite this negative sentiment, the pound fell against the greenback to 1.59.

Sterling also fell against the euro, slipping to 1.145.

Among Footsie stocks, blue-chip heavyweights BP, Pru-dential, Marks & Spencer and BT featured prominently on the fallers' board after a slew of broker downgrades.

Prudential declined 8p to 6281/2p after JP Morgan Cazenove downgraded the stock from neutral to underweight.

Bernstein Research also downgraded BT and cut its target price following a decent run for the stock, which stood 21/8p lower at 1467/8p.

Other fallers included oil giant BP, which dropped 31/2p to stand at 4323/8p after Royal Bank of Scotland said investors should expect an initially conservative approach to dividends should the payouts make a return early next year.

Retailer Marks & Spencer fell 51/4p to 4053/4p as HSBC worried about the trading outlook and said much of the good news found in last week's stronger than expected trading update was already factored into the share price.

Oil services group Petrofac led the market higher, after a lucrative contract win worth more than 250 million US dollars (156.8m).

The company made an announcement it was to take over operational responsibility and facilities management of the Sajaa gas plant, in Sharjah, in the United Arab Emirates (UAE) in a five-year deal. Shares closed 35p higher at 1428p.

In a quiet session for corporate news, easyJet was firmly in focus after it announced a deal to end its long-running row with founder Sir Stelios Haji-Ioannou and try to secure its use of the 'easy' brand.

It will pay Sir Stelios 0.25 per cent of its revenues each year, fixed at 3.9m and 4.95m for the first two years, plus another 300,000 annually.

Shares closed 23/4p higher to stand at 4541/4p.

Other risers in the FTSE 250 Index included bookmakers Ladbrokes after it said operating profits more than doubled in the third quarter. It benefited from the tail-end of the World Cup and a more favourable run of results at the start of the English football season. Shares were 31/8p higher at 1411/8p.

Wickes owner Travis Perkins fell 1 per cent after it reported a 6 per cent rise in turnover but said growth rates had slowed at its builders' merchant business in recent weeks.

Shares declined by 91/2p to stand at 8541/2p.

Elsewhere, win-a-supercar company Best of the Best slumped by nearly 50 per cent, down 121/2p to 17p, after BAA ended the firm's contract to display cars at its airport terminals.

The biggest Footsie risers were Man Group up 65/8p to 257p, Petrofac, Weir Group up 37p to 1580p and Schroders ahead 32p to 1488p. The biggest fallers were Autonomy Corporation down 35p to 1485p and Reckitt Benckiser Group off 54p to 3403p.