Blue chip shares tumble on gloomy start to Wall Street

BLUE-CHIP shares tumbled yesterday as a gloomy start on Wall Street provided the City with little festive cheer.

By London’s close, the Dow Jones Industrial Average was nearly 100 points adrift while the Nasdaq had also fallen sharply. Confidence was hit across the US markets as investors reacted to a run of bad corporate updates, including first-ever losses from fast food giant McDonald’s.

US-owned insurance and financial services firm Conseco’s decision to file for bankruptcy protection last night also cast a cloud over Wall Street.

It meant an already subdued session in London was depressed further and the FTSE 100 Index fell to fresh nine-week lows, closing 73.5 points down at 3835.2. At the start of the month, traders were hopeful for a traditional year-end rally but few now believe stocks will pick up over the next few days.

Among new economy stocks, mobile phone giant Vodafone shed 2.75p at 110.25p on news it was losing its chief executive Sir Chris Gent.

The 54-year-old intends to step down next year, to be replaced by Arun Sarin, currently a non-executive director at the group.

The biggest risers were BAE Systems, up 5.25p to 122.25p, Smith & Nephew, up 13.5p at 395.5p, Invensys, up 1.25p at 53.75p and AB Foods, up 8.5p at 566p.

The heaviest fallers were mmO2, down 4.25p at 44.75p, Corus, down 2p at 23.25p, Six Continents, down 37p at 502p and Sage, down 7.5p at 132p.