Footsie dragged lower by Cable & Wireless, Corus

THE London market was dragged lower today

By the close of trading the FTSE 100 Index was down 55.6 points at 4029.4 after the two stocks slumped following dismal trading updates.

However, a turnaround on Wall Street in afternoon dealing helped pull the top flight up from the session low of 3986.9.

In the City, Cable & Wireless slid a hefty 36% after the group unveiled a £800 million bill for a restructuring plan which will cost 3,500 jobs worldwide.

A hefty write-down also ensured interim losses reached £4.43 billion and there was little in the way of positive news.

That meant shares, which at the height of the tech boom hit 1400p, slid 47.25p to 83p.

Corus was also under pressure losing nearly a third of its value after announcing it had ditched plans for a £3 billion merger with Brazilian steel firm CSN.

But analysts were more concerned by Corus's forecast that the poor economic climate was likely to leave operating results in the second half weaker than expected. Shares fell 12.75p to 34p.

Banks were also among those weighing on the market, with Barclays down 15.5p at 428p, Lloyds TSB off 10p at 530p, Royal Bank of Scotland falling 38p to 1489p, HBOS easing 6.5p at 708.5p and HSBC off a penny at 707p. Insurers continued their losing streak, with Aviva off 12p at 488p, Royal & Sun Alliance down 6.75p at 116p.