The New Year has seen the UK stockmarket quietly breaching new four and a half year highs while retailers such as Sainsbury, Boots and Marks and Spencer have been updating the market with their figures on Christmas trade.

The British Retail Consortium said that this December was an improvement on 2004, however, the optimism did not spill over into the post-Christmas period.

The overall picture is mixed and there is some way to go before the retail sector pulls itself out of the doldrums.

Bradford-based Wm Morrison revealed that the shops which used to bear the Safeway insignia were improving unlike the original Morrison stores which continue to struggle.

Management had to sell off some of the better Safeway stores in order to get the thumbs up from the Competition Commission, allowing it to buy the bigger company. The well documented difficulties of the purchase saw a string of profit warnings in the last 18 months caused by problems in combining the two supermarkets.

Following the December closure of the Warrington warehouse, there was confirmation this week of the cost-cutting closure of inherited depots in Kent and Bristol - although it will mean a one-off charge of £60 million this year. City analysts reiterated their 'neutral' or 'sell' views following the trading update although there was an upgrade from 'sell' to 'hold' by Oriel Securities. They can see 'some green shoots of recovery' at the grocer. Now that the integration of the new stores has been finalised and trading looks to have hit the bottom, 2006 could prove to be crucial.

It did not take long for Pace Micro's share price to recover after its last profit warning. The shares are now higher than they were prior to the bad news, buoyed by details of a contract to supply SKY Italia with set-top boxes.

There should not be any nasty surprises lurking in the interim results, due tomorrow because the company took the bold step of updating the market prior to Christmas. However, the historic volatility of the shares, caused by the slash-and-burn mentality of short-term investors means this is not one for the faint-hearted.

Shipley's listed oil services company Global Marine Energy saw its subsidiary release trading data to the US market on January 10.

Patriot Mechanical Handling Inc, said it is 'confident that our order pipeline will continue to grow.' However the upbeat tone failed to halt the decline in either Patriot's or Global Marine's share price.