Many businesses have been forced this year to reevaluate their prospects as the world’s economic woes deepen, perhaps none more so than retailers.

This will ring true with investors in J Sainsbury more than most. In January, a bullish Justin King, the supermarket chain’s chief executive, dismissed the doom and gloom of the high street, claiming that his company would “thrive” in the challenging environment and that its performance would prove critics wrong.

Eight months later, the supermarket is struggling to keep pace with its main rivals and to defend market share amid tough competition from budget grocers. At least this is the view of analysts at JPMorgan, who yesterday downgraded the stock to “neutral” from “overweight”. They said that Sainsbury’s food trading was “the weakest of the big four and we can foresee trading worsening as the down-trading theme continues”.

However, the broker did add that Sainsbury had in its favour a lower exposure to nonfood compared with Tesco, its rival, which it said it could actually be out-trading.

The comments sparked renewed fears about Tesco’s nonfood business, which the chain admitted this year was not trading as well as had been hoped. The company is understood to be running aggressive promotions around its home delivery service to try to boost business.

Sainsbury’s shares fell 12p to 314¾p and Tesco closed 7.7p lower at 370½p.

Retail sales fears were further stoked by news that Marks & Spencer will bring forward its next trading update by a month, prompting concerns that it has suffered another sharp sales slump. The high street chain will report second-quarter figures on October 2 rather than wait until its half-year results in November. In another tough session for the retailer, which has been under pressure this week because of its plans to slash redundancy benefits, shares fell 3¾p to 252p.

The share price falls came ahead of retail sales data for July, due this morning, which are expected to show that lower activity on the high street for the second consecutive month.

Overall, the FTSE 100 rebounded from heavy losses on Tuesday, closing up 51.4 points to 5,371.8, as rising oil and commodity prices lifted the index’s heavyweight energy stocks. Higher commodity prices ensured that Rio Tinto, up 345p to £49.86, led the blue chips, with Eurasian Natural Resources climbing 67p to £10.27 before interim results this morning which are expected to show that net profit has more than tripled. Tullow Oil was also among the big risers, up 47½p to 741½p, after analysts at UBS upgraded the stock to “buy”, noting that further drilling success was likely in the near term.

The second string was led by Michael Page, the recruiter, which rose 30¾p to 360¾p amid speculation that Adecco, the Swiss staffing group, had raised its offer for the company to 500p per share. The British company’s chief executive was quoted in the Swiss press as saying that a sale could be possible at 600p per share or more.

New York: Good news from Hewlett-Packard sparked a rally in technology stocks that offset further falls for Fannie Mae and Freddie Mac, the mortgage giants, to levels not seen for more than 17 years. The Dow Jones industrial average closed 68.90 points higher at 11,417.40.

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