FTSE 100 close: US jobs shock hits shares
Surprisingly bleak US jobs data knocked markets for six this afternoon, leaving the Footsie more than a hundred points down.
Quiet day: Traders will wait on economic news from the US.
Non-farm payroll figures released by the US Labor Department showed that 467,000 people lost their jobs in June, significantly higher than the 363,000 economists had been expecting.
The news, which traders had awaited nervously, put the skids under shares on both sides of the pond: the Dow Jones Industrial Average fell 181.3 points to 8,322.8 and the Footsie, already 50 points down, dropped further to close 106.4 points down at 4,234.3.
'Our expectation throughout the crisis has been that the US would be the first major developed nation to emerge from recession and that it would experience a stronger bounce back,' said Richard Snook, senior economist at the Center for Economic and Business Research in London.
'Today's figures do not change this view - they merely highlight that the return to growth will not be without setbacks along the way,' he said.
Advertising giant WPP was heavily hit by the downgraded economic outlook, and closed 29p down at 384.5p.
Oil prices tumbled to their lowest level in a month, with a 3% slump to $66 and that sent hit resource-based stocks. BP fell 9.05p to 480.95p, while in the mining sector Anglo American dropped 106.5p to 1726p while Rio Tinto eased 123p to 2035p.
In a day in which just four firms ended on the risers board, drinks firm Diageo topped the leaders with an 8p rise to 905p. Diageo yesterday announced 900 job losses in Scotland as part of ongoing cost cutting.
Fellow drinks firm SAB Miller fell back after earlier gains, losing 20p to 1260p as it said it was considering selling a stake in its South African business to black investors.
Mobile phone giant Vodafone lost 4p to 115.5p after it buried the hatchet with Carphone Warehouse and agreed to sell its contract mobiles across the chain's outlets.
The firm dumped the chain as a supplier of contract mobiles in favour of an exclusive deal with Phones4U in October 2006, but has returned to the chain in an increasingly tough and competitive UK market.
In the FTSE 250, shares in pubs and brewing business Greene King rose almost 3% or 12.25p to 422.25p after the company said the recent warm weather had boosted trade. A broker upgrade from Investec Securities also helped the pub group make gains.
But there was no such rise for retailer Game, which tumbled more than 13%, or 22p to 142p, after detailing lacklustre trading figures for the first half of the year.
Back in the top flight banks failed to end higher after early rises following a broker upgrade for Standard Chartered and confirmation of the formal appointment of acting chairman John Peace in the role. Shares in the bank fell 25p to 1155p.
The only Footsie risers were Diageo up 8p at 905p, Petrofac up 3.5p at 683p, Friends Provident up 0.12p at 68.09p and Admiral Group up 1p at 877.5p.
The biggest Footsie fallers were WPP down 29p at 384.5p, Anglo American down 106.5p at 1726p, Rio Tinto down 123p at 2035p and London Stock Exchange down 38.5p at 663.5p.
In small caps, shares in Intermediate Capital climbed 15.5p to 505.5p after the private equity lender announced plans to bolster its resources by raising £351m. Numis says the rights issue 'should ensure that Intermediate will not breach its banking covenants and allow the group to broadly maintain its balance sheet as opposed to rushing to deleverage.
'Intermediate is clearly very cheap.'
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