YP75: Markets hit as Fed pledges not to print cash to boost US economy

The volatility to which we have come so accustomed over the past year, reared its ugly head again last week as markets started strongly on Monday and then plummeted on Tuesday as the Federal Reserve announced it would using less sizable measures to boost the US economy than many had expected.

The Fed said it will be adding money to the economy through further purchases of government bonds but this will not be done by printing money.

The news was clearly taken negatively by investors as questions over the strength of the recovery were once again raised.

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Later in the week, the Bank of England's quarterly inflation report compounded the markets' woes as growth was lower than expected and cost of living looks set to remain high in the short term.

Carpet specialist United Carpets Group reported an 85 per cent jump in pre-tax profits, to 1.1m, for the year to March 31, from 595,000 the previous year.

The company, which runs a chain of retail carpet and floor-covering stores, has benefited from its focus on franchising, which has seen store numbers rise to 82 while its corporate stores were reduced from 23 to 12.

This store rebalancing has boosted the Mexborough-based firm's business model and put it in a more favourable position for the future.

However, weaker trading more recently has highlighted that market conditions remain challenging and justify management's cautious outlook.

The outlook appears to be more promising for engineering group MS International. The company announced that the overall level of activity for the first quarter was improving across the group.

The designer and manufacturer of speciality engineering products also reported that orders in hand are more than 10 per cent higher than this time last year.

The Doncaster-based group's improvement in trading is being driven by its defence division which continues to benefit with a high level of work in hand for the year ahead.

In addition, management see a number of interesting opportunities emerging in the defence area which provide good potential for further business.

Elsewhere, Northern Foods announced it has reached an agreement to sell its Dalepak Frozen Foods Business as its focuses on key areas such as ready meals, biscuits and sandwiches.

The Leeds-based company will sell the business to the Irish Food Proceesors Group in a cash deal worth about 6.4m.

The Dalepak business employs 143 people who are expected to transfer to the Irish Processors Group.

The Dalepak division supplies a range of frozen foods with brands including Dalepak, Ross and Grassingtons.

The company sees the division as a non-core part of the business and intends to invest in many of its major brands, including Goodfella's pizzas and Fox's biscuits.

Edward RH Marsden Assistant Investment Manager at Brewin Dolphin, Leeds