IHG sees bottom line shrink, GSK upbeat on Zantac court decision

Stocks to watch

Crowne Plaza, Regent and Holiday Inn owner InterContinental saw its bottom line shrink by 10% in the first half due to the planned reduction of its so-called System Fund surplus, though underlying profits improved by 12% due to solid margin improvements and an acceleration in RevPAR growth in the second quarter. Operating profit from reportable segments improved to $535m, up from $479m the year before.

GSK was upbeat after a jury in an Illinois state court found its discontinued Zantac drug not liable for the plaintiff's colorectal cancer. The FTSE 100 pharmaceuticals giant said the outcome aligned with the scientific consensus that there was no consistent or reliable evidence linking the active ingredient ranitidine to an increased cancer risk. It said the verdict was supported by 16 epidemiological studies on ranitidine use, and added that it planned to continue vigorously defending itself against similar claims in ongoing litigation.

Newspaper round-up

The late arrival of warm summer weather drove a recovery in retail sales last month, industry data shows, despite continuing signs of consumers holding back on big ticket purchases amid the cost of living crisis. Figures from the British Retail Consortium showed that UK total retail sales increased by 0.5% year on year in July, a recovery from the washout month of June when colder weather deterred shoppers from spending on the high street. – Guardian

Google violated antitrust laws as it built an internet search empire, a federal judge ruled on Monday in a decision that could have major implications for the way people interact with the internet. Judge Amit Mehta found that Google violated section 2 of the Sherman Act, a US antitrust law. His decision states that Google maintained a monopoly over search services and advertising. – Guardian

Warren Buffett’s stock empire has lost at least $15bn (£11.75bn) on its biggest holdings amid a global stock market sell-off. The money was wiped from the paper value of Berkshire Hathaway’s stock portfolio on Monday as Apple, Bank of America and Mitsubishi plummeted in value. The decline comes despite Mr Buffett’s investment company building up major cash reserves in recent months by slashing its stock market positions. – Telegraph

Sensitive British military projects face disruption from the threatened closure of one of the country’s last remaining microchip factories. Coherent, a US semiconductor company, ceased taking orders at its facility in County Durham and said the 310,000 sq ft site may have to be sold after Apple dropped the business as a supplier. It can now be revealed the factory’s customers also include Leonardo, the Italian defence giant that makes radar systems, electronic warfare devices and helicopters in the UK. It is understood the plant has previously supplied chips used for radar power amplifiers in Typhoon jets and other British military platforms. – Telegraph

A global scramble by opportunistic hedge funds to exit a well-trodden cheap borrowing gambit has been blamed for the share sell-off that shook financial markets on Monday. Japan suffered a fully fledged flight from shares with stock prices falling by 12 percent and the jitters reverberated round the world, with share prices in London and then Wall Street falling sharply amid a stampede to reduce risk in portfolios and raise hard cash. – The Times

US close

Wall Street stocks closed sharply lower on Monday amid fears that a potential US recession may be on the horizon.

At the close, the Dow Jones Industrial Average was down 2.60% at 38,703.27, while the S&P 500 lost 3.00% to 5,186.33 and the Nasdaq Composite saw out the session 3.43% weaker at 16,200.08.

The Dow closed a whopping 1,033.99 points lower on Monday and the S&P 500 posted its worst day since 2022 as market participants continued to grow concerned that the Federal Reserve may be moving too slow when it comes to interest rate cuts if it wants to avoid a recession.

Stocks tanked globally on Friday, while Japan's Nikkei 225 closed more than 12% lower on Monday in its worst daily showing since 1987's Black Monday crash on Wall Street.

Recessionary fears were the main reason for losses following worse-than-expected July nonfarm payrolls numbers from the Labor Department that fuelled fears that US central bank was behind the eightball when it comes to cutting interest rates to bolster an economic slowdown just a week after opting to keep its benchmark rate at the highest levels seen in 20 years.