AB Foods maintains earnings, Experian adds to consumer offer

London open

The FTSE 100 is expected to open 5 points higher on Tuesday, recouping a small part of the previous day's losses.

Stocks to watch

First-half earnings from Associated British Foods were better than expected thanks to a long-awaited improvement in its sugar business, while its Primark clothing business endured a tough Christmas. Like-for-like sales at Primark were less than 1% below the previous year, while total sales rose 5% thanks to increased store selling space.

Experian has signed a definitive agreement to acquire consumer identity management and fraud detection services, CSIdentity Corporation, for a total of $360m (£251.4m). Experian said the transaction, which will be funded from its existing committed bank facilities, would be immediately enhancing to earnings and would accelerate its consumer services strategy by enabling the group to address a broader spectrum of the consumer market.

Newspaper round-up

Investors looking for income may have to give up on UK equity funds. A spate of FTSE dividend cuts has prompted an industry-wide debate about how the term “income fund” should be defined. Some of the most popular products selected by retail investors, income funds have attracted bumper inflows following years of rock bottom interest rates. To qualify for this label, funds must invest at least 80 per cent of their assets under management into UK equities and also achieve an average yield of more than 10 per cent above the FTSE All Share over a three-year period. – Financial Times

Investors ranging from small German savers to global life insurers have long complained about central banks’ use of negative interest rates. Now, however, another group is feeling the pain from negative rates — central banks themselves. European and Japanese rate cuts are putting pressure on many central banks’ returns — a source of income used to cover running costs and to provide finance ministries with profits on which they have come to rely. – Financial Times

Sir Martin Sorrell has defended his bumper pay package, arguing that he has put three decades of his life into building WPP from a maker of wire baskets into a £21bn global marketing business. Sorrell, whose total remuneration is likely to hit £70m when full details are revealed in WPP’s annual report in the summer, is set to face a backlash from shareholders at the company’s annual meeting in June. – Guardian

Tata Steel has appointed Standard Chartered to help it to sound out possible buyers for its loss-making British division after formally kicking off a sales process for Port Talbot and other steelmaking sites. The Indian company, which has close ties to Standard Chartered in India, has asked the bank to work with KPMG, the auditor, to identify a potential acquirer, especially among Chinese steelmakers. – The Times

US close

Stocks in the US started the week on a high, closing in the black on Monday, with healthcare and consumer discretionary spending among the top risers. The performance was underpinned by oil, which pared back most of its Asia and Europe losses during New York trading.

All three major indexes reversed opening losses. The Dow Jones Industrial Average finished up 0.6% at 18,004.16, the S&P 500 closed up 0.65% at 2,094.34, and the Nasdaq Composite was 0.44% higher at 4,960.02.

“I think the market’s up because of crude,” said TD Ameritrade chief strategist JJ Kinahan.

The Dow briefly breached the psychologically important 18,000 level to close above that level - reaching it for the first time in intraday trade since July 21 last year. Walt Disney, Chevron and Home Depot were the index’s biggest contributors.