EARNINGS RATIO OF 12.4 TIMES," SAID EDWARD MENASHY, AN ECONOMIST AND STRATEGIST AT BROKERAGE CHARLES STANLEY. "UNLESS THE WORLD COMES CRASHING DOWN, WE ARE GETTING REALLY VERY GOOD VALUE FOR THE MARKET. NEXT YEAR ARE WE GOING TO HAVE A HUGE FALL IN CORPORATE EARNINGS? THE ANSWER IS NO." THE LATEST U.S. DATA HELPED TO SOOTHE SOME NERVES AS INFLATION AND CONSUMER CONFIDENCE NEARLY MATCHED EXPECTATIONS AND WERE INTERPRETED BY INVESTORS AS DOING LITTLE TO INCREASE THE CHANCE OF ANOTHER INTEREST RATE HIKE FROM THE FEDERAL RESERVE IN JUNE. BUT SOME MARKET WATCHERS, INCLUDING INVESTMENT BANK MERRILL LYNCH, ARE TAKING A MORE CAUTIOUS STANCE, SAYING THAT NOW IS NOT THE TIME TO RETURN TO STOCK MARKET AS MORE DOWN-LEGS ARE ON THE WAY. BAA TAKES OFF AMONG INDIVIDUAL STOCKS, AIRPORTS OPERATOR BAA ROSE 4.2 PERCENT AFTER SPAIN'S GRUPO FERROVIAL SAID IT WOULD COOPERATE WITH ANY REGULATORY REVIEW OF THE UK AIRPORTS MARKET IF ITS 8.75 BILLION POUND OFFER WERE SUCCESSFUL. DEALERS SAID CONCERN THAT THE SPANISH COMPANY MAY BE COOLING ON ITS BID PLANS HAS BEDEVILLED THE STOCK RECENTLY. ELSEWHERE ON THE MERGER AND ACQUISITION TRAIL, DEPARTMENT STORE GROUP HOUSE OF FRASER JUMPED OVER 4 PERCENT TO 132 PENCE AFTER THE DAILY TELEGRAPH SAID ICELANDIC PREDATOR BAUGUR WAS READY TO MAKE A BID. HSBC WAS A TALKING POINT IN THE BANKING SECTOR, WITH ITS SHARES UP 1.7 PERCENT AFTER EUROPE'S LARGEST BANK SAID THE OUTLOOK FOR 2006 REMAINED ENCOURAGING. ON THE DOWNSIDE, SPREAD-BETTER IG GROUP LED THE FALLERS' LIST WITH A LOSS OF 1.4 PERCENT ON DISAPPOINTMENT THAT NAT LE ROUX, ITS CHIEF EXECUTIVE WHO RE-LISTED THE FIRM LAST APRIL, PLANNED TO STEP DOWN.
