UK insurer Standard Life led the advancers though after reports emerged over the weekend that French insurer AXA is considering a takeover approach for the group. Standard Life advanced 2.12%.

British Energy, Drax and Centrica extended their gains from last week on the back of news that Morgan Stanley is planning to invest $3bn in the carbon trading market. Drax is 1.49% higher, while Centrica is 0.83% up. British Energy is currently trading flat.

Autonomy improved slightly 0.05% after the infrastructure software house said it has entered into a multi-million pound contract with the UK government to deploy Autonomy IDOL Server software.

Decliners

Pearson fell 1.66% despite reporting nine-month total sales up 11% and operating profit up 26%. It said the fourth quarter is a key selling season in higher education and consumer publishing, but added it was confident that 2006 will be another good year.

Cadbury Schweppes sank 1.96%. The company will maintain its current revenue growth target from 2007 but will abandon a specific target for operating margins, took its toll. The chocolate group will look to grow annual revenues between 3 and 5% per annum and grow operating margins over time.

Kazakh-based miner Kazakhmys dipped 1.07%. The company announced a rise in production in copper for the third quarter but said the level of other metals mined fell in the period. Copper cathode production advanced 9% compared with the second quarter.

Argos-owner Home Retail Group was hit hard after JP Morgan started coverage on the retailer with an underweight recommendation.

Other news

The number of mortgage approvals in September were at their highest in more than two years, the Bank of England said on Monday, reinforcing expectations its monetary policy committee will increase interest rates to 5 per cent next month.

Britain has called for rapid action to combat global warming, with the publication on Monday of an alarming report that warns of an economic and environmental catastrophe.


9:00AM Stock futures pointed to a lower start amid disappointing Wal-Mart sales.
Stock market futures indicated a weak opening, as Wal-Mart reported lower-than-forecast October sales which added to concerns about the health of the U.S. economy.

Wal-Mart (WMT: chart) said same-store sales gained just 0.5% in October, its smallest rise in nearly 6 years, blaming the lower growth on disappointing apparel demand and disruption from store remodeling projects. The world''s largest retailer had previously predicted a sales rise between 2% and 4%. Wal-Mart shares fell 1.4% in electronic composite trading. At the same time, Yahoo ((YHOO) shares rose 2% after Merrill Lynch upgraded its stock to buy from neutral ahead of the seasonally-strong holiday period. American Power Conversion (APPC: chart) shares jumped more than 26% after French electrical engineering company Schneider Electric agreed to buy the company for $6.1 billion.

On the earnings news front, Humana (HUM: chart), health benefit company, said Q3 net income more than doubled to 95 cents a share, up from 28 cents a share, with revenue up 48% to $5.65 billion. However, results came in below expectations of 97 cents a share on revenue of $5.9 billion. Blue-chip telecommunications provider Verizon Communications Inc. (VZ: chart) reported Q3 profit slightly above analyst estimates, while No. 1 U.S. radio company Clear Channel Communications Inc. (CCU: chart) posted net income drop, despite revenue growth. S&P 500 futures were down 2.2 points, barely above fair value. Dow Jones industrial average futures fell 17 points, and Nasdaq 100 futures were down 1.25 points.


8:00AM Schneider Electric offered $6.1 billion for American Power Conversion.
Schneider Electric, French electrical-equipment group, agreed on Monday to acquire American Power Conversion Corp. (APCC: chart) for $6.1 billion in cash. Schneider’s offer is worth $31 for each APC share, a 30% premium to the Friday closing price. The deal is based on an enterprise value of $5.5 billion and will be financed through a combination of cash, debt and a 1.2 billion-euro ($1.5 billion) capital increase. Schneider expects the deal to complete in Q1 of 2007. It has been approved by APC’s board of directors, but still needs to be approved by APC shareholders. Lazard and Merrill Lynch are Schneider’s advisors for the deal, while Goldman Sachs is APC’s financial advisor.


The acquisition will make Schneider a world’s leader in the market for critical-power services, which ensure uninterrupted power supplies to data centers and production facilities. Schneider is planning to merge APC with its power-protection MGE UPS unit to strengthen its position in a secured power-market that''s expected to grow at 8% a year.

The transaction is expected to help Schneider''s earnings per share increase from 2007 and meet its criteria for three-year return on capital employed for acquisitions. By 2009, the combined critical power business is expected to generate annual sales of $4.1 billion to $4.3 billion, representing a 10% growth per year, from a pro forma $3.1 billion in 2006. Earnings before interest, taxes, depreciation and amortization should rise to $700 million to $800 million from $300 million, with the margin rising to 17% to 19% from a pro forma 10 %. Schneider expects the acquisition to generate over $3 billion of ‘value creation.’