FTSE rises after earnings lift

LONDON (Reuters) - The FTSE 100 rose on Tuesday, buoyed by some encouraging earnings reports but with trade cautious ahead of a tight U.S. presidential election.

The FTSE 100 was up 39.26 points, or 0.7 percent, at 5,878.32 by 1145 GMT, after slipping 0.5 percent on Monday in thin volume.

Marks & Spencer rose 1 percent after the bellwether British retailer beat profit forecasts. Shares in the company have risen 14 percent over the last three months, lifted by persistent speculation regarding a possible offer from private equity or a sovereign wealth fund.

The UK retail sector is facing significant headwinds, demonstrated by a sharp deceleration of British retail sales in October, according to the British Retail Consortium, and there risk of profit taking on the share price.

Despite this, there are "a number of long-term drivers of capital value and dividends that lead us to retain a positive stance over a broader horizon," Clive Black, analyst at Shore Capital, said, citing new channels in beauty and e-commerce products.

He also saw scope for substantial free cash flow in the long term and potential from underperforming core womenswear.

Technology firm ARM gained 3.5 percent on reports that Apple may use the company's chips in their desktop range.

The company also said it would contribute $167.5 million to a consortium to acquire the rights to a MIPS Technologies' portfolio of hundreds of patents. ARM traded over 120 percent of its average 90 day volume by 1120 GMT.

Elsewhere, InterContinental Hotels, the world's biggest hotelier, also gained on the back of good results, adding 1.7 percent after it unveiled operating profit of $167 million in the quarter to the end of September, marginally beating consensus forecasts.

This came as the British-based group said it is opening up talks on the sale of its New York Barclay hotel to a wider group of prospective buyers after holding lengthy exclusive talks with one group.

By 1130 GMT, trading volumes were at a mere 28 percent of the 90 day average, which itself has been suppressed by weak activity over the summer, as investors awaited the outcome of Tuesday's presidential election in the U.S. before taking

"Markets will be very quiet today with traders watching the U.S. elections above anything else," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages around $500 million of assets.

"The topic for the next two months will be how the politicians are going to avoid the fiscal cliff (automatic budget cuts) which might be easier if there is a clear winner today."

(Additional reporting by Tricia Wright. Editing by Jeremy Gaunt.)

Source: http://news.yahoo.com/ftse-creeps-higher-u-election-focus-082215878--finance.html

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