The FTSE 100 broke through the magical 6500 barrier thanks to a terrific day for mortgage lenders, only to be dragged back in afternoon trading to close on 6486.4 - a 53.4 point gain, or 0.83%.
This morning's news US dealmaker Chris Flowers was given access to Northern Rock’s books after lodging a takeover proposal drove the lenders to post the day's most impressive gains.
Alliance & Leicester was the best of the bunch; it climbed 62 points, or 8.46%, to 795 – while Northern Rock itself also climbed sharply, up 11.5 points, or 6.32%, to 193.5.
Homebuilding company Taylor Wimpey also rose significantly to close on 275, a 17 point gain or 6.59%.
Contract caterer Compass fell 9.5 points, or 2.97%, to 310.75; while mining giants Vedanta Resources also lost ground, down 52 points, or 2.475, to 2057.
In New York, an early rise for the Dow Jones has been offset this morning as news August new home sales fell 8.3% from the previous month. The index is currently 7.31 points ahead, or 0.05%, to 13885.46.
The world's leading primary aluminium producer Alcoa is leading the gains, up 0.64 points, or 1.66%, to 39.11.
Wal-Mart and Caterpillar are also doing well, up 1.39% to 43.9 and 1.23% to 77.6 respectively.
General Motors is struggling so far; the automobile conglomerate is down 0.58 points, or 1.54, to 37.06.
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