The FTSE 100 nose dived at midday with the technology sector ablaze following a spate of earnings...
The FTSE 100 nose dived at midday with the technology sector ablaze following a spate of earnings warnings, most notably from US technology titan Cisco Systems.
The FTSE 100 trailed 95.2 points lower to 5671.4.
After trade closed on Wall Street yesterday, networking equipment manufacturer Cisco Systems dropped a bombshell on hopes of a technology recovery as it announced a stern profits warning as well as plans to axe a quarter of its world wide workforce. The US economic slowdown, weak demand in Asia and parts of Europe were all held to blame.
And just to kill off any new economy comeback optimism, speculation of widespread job cuts for telecom stalwart Ericsson flooded the city.
Furthermore, trading statements from IBM and Intel due later today threaten to worsen the outlook.
Leading a raft of FTSE 100 new economy losers was Energis, down 31p to 270p. Dimension Data lost 28.25p to 260p and Colt Telecom shed 66p to 654p.
Not a whiff from the new economy among the FTSE 100 risers and leading gains were capped at around 3%. Allied Domecq led the gainers up 11.75p to 439.75p. It's been a good day for drinks groups in general after Goldman Sachs maintained its recommended rating on Diageo and a 810p price target. Diageo improved 9.5p to 719.5p. A Good day for retailers too, with Tesco, Sainsbury, Kingfisher and Marks and Spencer all on the leaders table.
The big loser at midday was tiddler FfastFill. A full year profit warning capsized city confidence in the software manufacturer. Problems were blamed on instability in its software, which the group assures are now solved. Ffastfill pointed out its cash balances of around £11.5m are equivalent to more than 25p per share. But the stock lost 7p to 17.5p.
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