LONDON (AFX) - The FTSE 100 managed to pull back some of the day's losses midafternoon as US indices edged higher but was still under pressure as a profit warning at Next hit UK retailers, dealers said.
At 2.58 pm, the FTSE 100 was off 27.4 points at 4,819.6, after hitting a low of 4,806.2. The broader indices were also weaker.
Volume was moderate, with 1.6897 bln shares changing hands in 173,354 deals.
Over on Wall Street, the DJIA rebounded 41.3 points to 10,672.1, while the Nasdaq Composite was up 5.25 points at 2,113.11.
On today's agenda is the December ISM services index (1500 GMT), seen at 60.8 versus 61.3 in November.
The US Department of Energy weekly petroleum inventories report is also scheduled for release. Crude prices eased ahead of the report, but concerns about heating fuel supply following forecasts of colder weather could push prices higher.
Back in the UK, retailers suffered after Next, thought to have seen the best trading over the Christmas season relative to rivals, issued a full year profits warning.
The UK's third largest clothes retailer warned that profits will be dented after it failed to clear higher-than-expected levels of stock as quickly as it had anticipated in post-Christmas sales.
As a result, Next lowered its internal profit forecast by 5 mln stg.
In response, Seymour Pierce downgraded its recommendation on Next to 'hold', though Citigroup repeated its 'buy' rating.
Next was down 46 pence at 1,635, Marks & Spencer fell 4 pence to 340, Kingfisher was down 6-3/4 at 309-1/2 and Boots dropped 9 to 639.
There was also profit warning today at betting group Stanley Leisure, which sent the shares down 44-1/2 pence to 386-1/2.
Stanley Leisure said this morning it now expects to report full-year profits "broadly in line" with last year. It posted pretax profit before goodwill for the 53 weeks to May 2 2004 of 41.8 mln stg.
The company said unfavourable sporting results within its core Betting division and material losses in the Gaming division are to blame.
Shares in William Hill and Hilton Group (which owns Ladbrokes) fell 24 to 559 and 7 to 278-1/2, respectively.
Tobacco groups were under pressure as CSFB highlighted some mixed data on the European sector from research group AC Nielsen.
In CSFB's view, AC Nielsen retail sales volume data showed a mixed picture with the UK and Germany remaining weak and France, Italy and Spain recovering.
Elsewhere, UBS said it believes a merger of Imperial Tobacco and Altadis is unlikely, with a takeover of the Spanish group by Imperial much more of a possibility.
Imperial was down 12 at 1,418, Gallaher dropped 12-1/2 to 790-1/2 and BAT fell 6-1/2 pence to 906.
Meanwhile, blue chips trading ex-dividend also weighed on the FTSE 100, with BOC down 36-1/2 at 979-1/2, Allied Domecq 19 lower at 505-1/2 and GUS down 20-1/2 at 929.
There were very few blue chip risers. Xstrata rallied 2 pence to 889-1/2 after a slide in the shares yesterday due to the publication of WMC Resources' bid defense document. There is some scepticism about the independent valuation of WMC in the document, making a much improved offer from Xstrata less likely.
Ongoing vague takeover speculation continued to boost Royal & Sun Alliance, up 0-1/4 at 80-3/4, though no specific predators were mentioned.
AstraZeneca gained 17 at 1,927 as investors switched out of GlaxoSmithKline, on speculation Glaxo is the preferred bidder for Bristol Myers OTC business.
Among the midcaps, WH Smith bucked the retail trend, rising 8-3/4 to 318-3/4 on speculation its Christmas trading performance has been solid.
Meanwhile, Premier Foods lost 5-1/4 to 269-3/4 as news the group expects profits for 2004 to be in line with market forecasts failed to impress.
Finally, Michael Page was under pressure, down 11 ar 178, after the staffing firm was downgraded by Deutsche Bank to 'sell' from 'hold'. Deutsche Bank argued that a forecasted fall in UK GDP growth in the latter part of 2005 will hit recruitment firms.
sm/bam
For more information and to contact AFX: www.afxnews.com and www.afxpress.com
At 2.58 pm, the FTSE 100 was off 27.4 points at 4,819.6, after hitting a low of 4,806.2. The broader indices were also weaker.
Volume was moderate, with 1.6897 bln shares changing hands in 173,354 deals.
Over on Wall Street, the DJIA rebounded 41.3 points to 10,672.1, while the Nasdaq Composite was up 5.25 points at 2,113.11.
On today's agenda is the December ISM services index (1500 GMT), seen at 60.8 versus 61.3 in November.
The US Department of Energy weekly petroleum inventories report is also scheduled for release. Crude prices eased ahead of the report, but concerns about heating fuel supply following forecasts of colder weather could push prices higher.
Back in the UK, retailers suffered after Next, thought to have seen the best trading over the Christmas season relative to rivals, issued a full year profits warning.
The UK's third largest clothes retailer warned that profits will be dented after it failed to clear higher-than-expected levels of stock as quickly as it had anticipated in post-Christmas sales.
As a result, Next lowered its internal profit forecast by 5 mln stg.
In response, Seymour Pierce downgraded its recommendation on Next to 'hold', though Citigroup repeated its 'buy' rating.
Next was down 46 pence at 1,635, Marks & Spencer fell 4 pence to 340, Kingfisher was down 6-3/4 at 309-1/2 and Boots dropped 9 to 639.
There was also profit warning today at betting group Stanley Leisure, which sent the shares down 44-1/2 pence to 386-1/2.
Stanley Leisure said this morning it now expects to report full-year profits "broadly in line" with last year. It posted pretax profit before goodwill for the 53 weeks to May 2 2004 of 41.8 mln stg.
The company said unfavourable sporting results within its core Betting division and material losses in the Gaming division are to blame.
Shares in William Hill and Hilton Group (which owns Ladbrokes) fell 24 to 559 and 7 to 278-1/2, respectively.
Tobacco groups were under pressure as CSFB highlighted some mixed data on the European sector from research group AC Nielsen.
In CSFB's view, AC Nielsen retail sales volume data showed a mixed picture with the UK and Germany remaining weak and France, Italy and Spain recovering.
Elsewhere, UBS said it believes a merger of Imperial Tobacco and Altadis is unlikely, with a takeover of the Spanish group by Imperial much more of a possibility.
Imperial was down 12 at 1,418, Gallaher dropped 12-1/2 to 790-1/2 and BAT fell 6-1/2 pence to 906.
Meanwhile, blue chips trading ex-dividend also weighed on the FTSE 100, with BOC down 36-1/2 at 979-1/2, Allied Domecq 19 lower at 505-1/2 and GUS down 20-1/2 at 929.
There were very few blue chip risers. Xstrata rallied 2 pence to 889-1/2 after a slide in the shares yesterday due to the publication of WMC Resources' bid defense document. There is some scepticism about the independent valuation of WMC in the document, making a much improved offer from Xstrata less likely.
Ongoing vague takeover speculation continued to boost Royal & Sun Alliance, up 0-1/4 at 80-3/4, though no specific predators were mentioned.
AstraZeneca gained 17 at 1,927 as investors switched out of GlaxoSmithKline, on speculation Glaxo is the preferred bidder for Bristol Myers OTC business.
Among the midcaps, WH Smith bucked the retail trend, rising 8-3/4 to 318-3/4 on speculation its Christmas trading performance has been solid.
Meanwhile, Premier Foods lost 5-1/4 to 269-3/4 as news the group expects profits for 2004 to be in line with market forecasts failed to impress.
Finally, Michael Page was under pressure, down 11 ar 178, after the staffing firm was downgraded by Deutsche Bank to 'sell' from 'hold'. Deutsche Bank argued that a forecasted fall in UK GDP growth in the latter part of 2005 will hit recruitment firms.
sm/bam
For more information and to contact AFX: www.afxnews.com and www.afxpress.com
© 2005 AFX News
