Many Americans have their troubles, but fewer of them, it seems, are drowning their sorrows. Perhaps they can no longer afford it. Whatever the reason, the golden age of growth in the US spirits market is unlikely to return, according to Barclays Capital.

The gloomy prediction drove down Diageo, the drinks group, by 7p to 993p yesterday. The broker said that the Smirnoff maker was a hostage to changing trends in America, such as lower prices, and that its expectations for the current quarter may be over-optimistic.

BarCap noted that the United States had generated 40 per cent of Diageo’s profit growth in the past three years and that, with Europe already weak, it didn’t think that emerging markets could drive growth quickly enough to make up the shortfall. Therefore, it has started coverage of the stock with an “underperform” rating.

Elsewhere, however, there was cause for celebration as the FTSE 100 advanced 70.68 points to 5,107.89, with strong gains for the mining and retail sectors.

Fresnillo was the biggest riser, up 69p to 820p, Kazakhmys added 77p to £11.97 and Xstrata gained 53p to 956p, buoyed by higher metal prices. Upbeat trading updates lifted Marks & Spencer, up 20½p to 361½p, and Next, which rose 102p to £19.12. Home Retail Group added 15.3p to 299.2p.

Thomas Cook soared 14.3p to 207.4p after Collins Stewart upgraded the holidays group to “buy”, saying that it was unfairly one of the most oversold stocks in the FTSE 100. The broker noted the shares had fallen by 22 per cent since Arcandor’s stake had been placed and, while it was cautious about the potential impact that rising unemployment could have on travel demand, it thought a 10 per cent to 20 per cent discount to TUI Travel, its rival, up 12½p at 239.8p, was a bit harsh.

Cadbury was the biggest faller, losing 11p to 766p, after underwhelming results from Kraft and comments from the US food group that it will not overpay for the confectionery business.

Lloyds Banking Group gave up ground made in the previous session, which saw the confirmation of a rights issue, falling 1.04p to 86.29p. Royal Bank of Scotland regained 0.54p to 36.47p.

GlaxoSmithKline fell 7p to £12.21½ and Royal Dutch Shell eased 6p to £17.96 as both blue chips traded without rights to their dividends.

BAE Systems dipped 0.2p to 313.4p despite RBS suggesting that the defence group was not as vulnerable to cuts in UK and US defence equipment procurement as the market imagined. The broker added that the stock was being valued at the same level as at the end of the Cold War, when the industry faced significant challenges, but that today’s situtation bore no resemblance to events of 20 years ago.

Tullow Oil rose 52p to £12.10 after one of its management team was quoted as saying that its Tweneboa field offshore Ghana could contain as much oil as its Jubilee oilfield.

In the FTSE 250, Laird fell another 8.7p to 129½p after UBS downgraded the electronics group to “neutral”, citing potential delays on flagship devices at Nokia, one of its big customers, and uncertainty over dividends.

? New York: Rising commodity prices and positive corporate results lifted the mood on Wall Street. The Dow Jones industrial average closed at 9,802.14 points, up 30.23.

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