Footsie down as Dow struggles

The uncertain run by the FTSE 100 Index continued today when early gains of more than 35 points were wiped out following a weak start in New York.

Fears that interest rates will go up in the United States were fuelled by strong consumer confidence data, driving stocks lower and undoing a rally in London built on a legal settlement between drugmaker Shire and a US rival over its best-selling medicine.

The Footsie ended the session 20.8 points lower at 5672.4 although the picture was worse across the Atlantic where the Dow Jones Industrial Average had sunk more than 120 points.

Leading those stocks in positive territory was Shire after it revealed that US group Impax would be allowed to make generic versions of its Adderall XR hyperactivity drug by 2010 and would pay a royalty from the sales.

Shares in Shire set a four-year high by rising 49.5p to 884.5p as analysts said the agreement over Adderall should give the group sufficient time to move patients on to its next generation treatment.

It was tracked by GUS, which gained 15.5p to 990p after broker UBS lifted its profits forecast to reflect a better performance at its Argos chain. Primark owner AB Foods also benefited from a UBS upgrade, improving 24p to 826.5p.

Elsewhere in the retail sector, Dixons group DSG International was unchanged at 174.25p as official data showed electrical goods and furniture stores led the winners on the high street in December.

But utility companies were among the worst performing stocks of the session as investors took profits after a recent strong run for the sector.

International Power fell 6p to 270p, while Scottish & Southern Energy dipped 7.5p to 1065p and Severn Trent faded 14p to 1111p.

Elsewhere in the top flight, Vodafone continued to struggle with a fresh decline of 3.25p to 118p.

The mobile phone giant is due to update the market on Tuesday on its performance in the third quarter, with analysts hoping that it will show signs of benefiting from its investment in 3G networks.

Among smaller firms, ringtones specialist MonsterMob was in the black after announcing the takeover of a leading Chinese mobile games developer for up to 35 million US dollars (£19.9m). MonsterMob shares cheered 5p to 386p.

A bidding war sent shares in crash test dummy maker First Technology up 75.5p to 351p after its board ditched support for an offer by US giant Honeywell to back a £251 million takeover by Danaher Corporation instead.

Danaher has agreed to pay 330p for each share in the UK firm, representing a 20% premium on the Honeywell bid.

The highest Footsie risers today were Shire up 49.5p to 884.5p, Pearson rising 31p to 717.5p, AB Foods up 24p to 826.5p and Wolseley rising 29p to 1330p.

The heaviest fallers were PartyGaming off 5p to 142.75p, Vodafone down 3.25p to 118p, BT Group off 5.5p to 203.75p and BSkyB down 12.5p to 491.5p.