Speculation that the United States Federal Reserve will not cut interest rates much further saw a...
Speculation that the United States Federal Reserve will not cut interest rates much further saw a drop in stocks worldwide.
While Federal policy makers will probably cut their benchmark interest rate to a seven-year low of 4% on Tuesday, US interest rate futures imply investors don't count on the Fed pushing the overnight rate any lower than that this year.
The Footsie fell 78 points to 5818.8, led by drops from CMG Plc, Logica Plc, Marconi Plc and Colt Telecom Group Plc.
Logica erased 47p to 833, CMG 205p to 374, Marconi 14p to 357p and Colt Telecom 25p to 811.
In the banking sector Barclays fell 50p to 2228p, Lloyds TSB Group 13.5p to 741.5. Banks benefit from lower interest rates, which typically boost demand for lending and reduce risk of loan defaults.
HSBC also contributed to the decline. Europe's largest bank by market value, dropped 23p to 868, wiping 9.13 points off the Footsie.
In the US the Nasdaq dropped 5.50 to 1829. The Standard and Poor's 500 Index fell 1.10 to 1250 and the Dow Jones slipped 5 to 10,860.
McDonald's Corp dropped 24 cents to $27.50, after a money manager told Barron's that European sales are falling because of mad-cow disease.
Even if the disease doesn't appear in the US the stock may still drop 40%, according to a Barron's report. McDonalds' revenue has increased an average 7.8%during the past five years, while per-share profit has increased largely thanks to stock buybacks.
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