Wall Street woes lean on FTSE

The London market’s volatile week continued today as investors reacted to a sharp fall for shares on Wall Street last night.

Jitters ahead of the forthcoming earnings season in the United States drove the slump, which took the S&P 500 firmly into bear market territory.

The FTSE 100 Index lost the strong gains seen yesterday as it fell 85.1 points to 5444.5 by mid-morning.

The loss of confidence was most notable in the consumer sector, with B&Q owner Kingfisher off 5.9p at 98.6p and Carphone Warehouse down 9.65p at 192.6p.

Cadbury led the Footsie fallers after Merrill Lynch downgraded the confectionery firm to underperform and reduced its price target to 575p.

Shares fell 40p to 607p, a drop of 6%, while consumer product firms Unilever and Reckitt Benckiser eased 48p to 1435p and 95p to 2554p respectively.

Associated British Foods, which reported weaker sales growth at its Primark discount fashion chain, fell 24p to 744p, even though rising prices caused revenues at its grocery division to jump 30%. In the FTSE 250 Index, Sports World owner Sports Direct International fell 9.25p to 62p after profits fell 51% and chairman Mike Ashley reported the worst trading conditions in 25 years.

There was some positive news from the housebuilding sector after Barratt Developments announced a deal with lenders to strengthen its finances.

Barratt painted a bleak picture on current trading, but shares were still 5.5p higher at 59.5p, a gain of 13% in the FTSE 250. Taylor Wimpey, which has its own financing difficulties to resolve, lifted 3p to 33.25p while Charles Church owner Persimmon added 6.75p to 254.5p.

Experian was one of just a handful of blue-chip stocks in positive territory, up 17.25p to 378.5p after it posted a resilient trading statement.