FTSE in the red

The London market closed lower today as improved US jobs data failed to offset fears over the wider economy.

FTSE in the red

The London market closed lower today as improved US jobs data failed to offset fears over the wider economy.

The FTSE 100 Index was 59.5 points down at 5846.95 as credit agency Moody's decision to place US debt on review for a potential downgrade continued to trouble investors.

The prospect that the US could lose its AAA-status undermined the market's confidence after Federal Reserve chairman Ben Bernanke's pledge to consider more stimulus measures to boost growth in the world's biggest economy.

The announcement from Moody's came on top of ongoing fears about the eurozone debt crisis as Italy was forced to pay more to borrow money at an auction today.

There are still concerns about whether Greece could default on its debts after its credit rating was downgraded further into junk status by Fitch.

Wall Street's Dow Jones Industrial Average spend much of the session in the black after the US Labor Department said applications for unemployment benefits fell to a three-month low last week.

The pound was down against the dollar at 1.61 after the strong jobs data but it was up against the euro at 1.13 on the back of ongoing eurozone debt fears.

In London, Associated British Foods jumped 2% after a robust trading update. It revealed that sales at Primark increased by 13% in the 40 weeks to June 25, with the rate rising to 15% in the final 16 weeks of the period.

Broker Credit Suisse raised its price target on the stock, helping lift AB Foods near to the top of the risers board, up 24p to 1081p.

In the same sector, Premier Foods led the FTSE 250 Index after the Hovis owner appointed the European boss of Kraft Foods to lead the company's recovery following a profits warning earlier this month. Shares were up 18%, or 3.56p to 21.7p.

Elsewhere, shares in Daily Mail & General Trust fell 4% after it announced plans for a 5p cover price increase on the weekday Daily Mail and said advertising revenues for its national titles were down 7% in the 13 weeks to July 3. Shares dipped 18p to 421.4p.

Retailer Mothercare was another faller, down 5.6p to 405p, after it reported a further set of lacklustre sales figures from its UK business.

Yellow Pages owner Yell saw its shares drop 24% after it announced a new strategy that will see it reinvent itself as an online hub.

Following a six-month review, Yell has a new strategy that will allow consumers to find businesses in their area as the company looks to return the business to growth by 2015.

The move will help it to offset falling sales in its directory printing business, but analysts were not impressed. Shares dropped 2.6p to 8.4pp.

The biggest Footsie risers were Fresnillo up 75p at 1595p, Lloyds Banking Group ahead 1.4p at 45.8p, Associated British Foods up 24p at 1081p and Admiral Group ahead 32p at 1579p.

The biggest Footsie fallers were Petrofac down 57p at 1445p, Cairn Energy off 13.8p at 387.3p, Intercontinental Hotels down 41p at 1241p and ARM Holdings off 17p at 574.5p.

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