1:00PM New York, 6:00PM London - UK stock advanced. Scottish and Newcastle snubs Heineken, Carlsberg offer.

The UK shares rose lifted by gains by Vodafone and Intercontinental, which led the gainers on the FTSE 100. Shell rose after reported a surge in profits for the third quarter. Financial shares led the decliners. Scottish and Newcastle retreated on news that it had rejected Heineken and Carlsberg buyout offer.

In London trading, FTSE 100 index advanced 1.4% or 94 at 6,576.30. Of the index shares, 86 advanced, 12 declined, and 4 remained unchanged.

Scottish & Newcastle on Thursday rejected a 6.8 billion pounds or $14 billion joint offer from Heineken and Carlsberg. Scottish & Newcastle said the offer, worth 720p a share in cash, was highly conditional"""" and substantially undervalues the brewery. Carlsberg with 54% stake in the joint offer and Heineken will own 46%.

The consortium of two companies said in a joint-statement released today, “The Consortium intends that, following closing of any offer, 50% of BBH, the French and Greek operations as well as the participation in the Chinese business will be transferred to Carlsberg. Heineken would hold the remaining businesses, principally the UK & Irish, Portuguese, Finnish, Belgian and US operations as well as the participation in the Indian business.”

""""This unsolicited and derisory proposal is an effort to get S&N''s unique portfolio of businesses on the cheap,'''' Scottish & Newcastle chairman Brian Stewart said Thursday in a statement. He added: """"We will continue to take all actions to maximize shareholder value.''''

Shares of Scottish & Newcastle slipped 0.5% at 758.5 pence in afternoon trade.

Oil prices surged after an unexpected fall in U.S. crude stockpiles. U.S. light sweet crude added $1.62 to $88.72. Earlier it had reached $89 nearing a peak reached earlier in the week at $90.07.

UK Brent crude surged by $1.59 to $85.96 and neared the peak of $86.28.

The ongoing tensions along the Iraqi border between Turkey and Kurdish rebels have also been instrumental in the skyrocketing of oil prices.

Of the FTSE 100 shares, Vodafone led the advancers with a rise of 6.5% followed by increases in Intercontinental of 6%, Home and Retail and Old Mutual of 5%, and Prudential of 4.6%.

Of the FTSE 100 Index shares, Capita group led the losers. It fell 5.5% followed by Alliance of 3%, Barratt Development of 1.8% while Centrica closed weaker at 1.3%

Royal Dutch Shell PLC reported on Thursday third quarter profit increase of 16% despite a decline in production from $5.94 billion recorded in the same period last year to $6.92 billion. Sales climbed $90.7 billion from $84.3 billion.

Earnings from refining and marketing increased 70% to $1.65 billion but operating margins declined.

BP PLC on Tuesday reported a 29% drop in earnings to $4.4 billion on refineries problems and lower productions.

Shell production of oil and gas fell 3.4% from 3.25 million barrels of oil or equivalents per day to 3.14 million. That led to a 6% drop in production earnings to $3.51 billion. The share rose 0.6%.

Standard Life has made a conditional takeover approach for insurer Resolution, valuing its smaller rival at around 4.9 billion pounds. The stock declined1.25%.

11:30AM New York – U.S. stocks lost early lead on weaker than expected durable goods orders.

Stocks in New York climbed after durable goods orders and earnings from Sony, Honda, Nintendo, Royal Dutch Shell, Bristol Meyers Squibb, and Aetna.

The Commerce Department reported that September durable goods orders fell 1.7% after August orders were revised to a drop of 5.3% from 4.9%. New home sales in the month increased 4.8% to annual rate of 770,000 and August month sale were lowered to 735,000. The median price of home sold increased to $238,000 in September from a year ago.