Oil stocks and pharmaceuticals are this time dragging the UK stockmarkets down this morning, as the ...
Oil stocks and pharmaceuticals are this time dragging the UK stockmarkets down this morning, as the slowdown in growth is beginning to impact some of the bear stocks.
BP and Shell Transport & Trading Co both lost ground after the International Energy Agency lowered its forecast for global oil demand in the second half of this year.
The IEA, which advises 26 nations on oil policy, yesterday said in a monthly report that second-half energy demand will drop because the world economy has yet to rebound. Third-quarter consumption will rise by 700,000 barrels a day from a year ago, down a third from last month's estimate.
BP subsequently dropped 9 pence, or 1.6%, to 551p while Shell Transport & Trading Co. slipped 10p, or 2%, to 502p.
GlaxoSmithKline Plc lost value for the second day in a row after U.S. rivals Abbott Laboratories said earnings will miss forecasts and Merck & Co. signalled it may delay the release of a new painkiller.
All of this has brought the FTSE 100 down 61.5 points, or 1.3%, to 4873.3 as those four stocks along accounted for two-fifths of the losses.
ARM Holdings has fallen l 7p, or 3.9%, to 173p because it may be ousted from the FTSE 100 at the close of business today.
Yates Group, however, has added 9p, or 5.6%, to 168.5p because the owner of Yates Wine Lodges and Ha! Ha! Bars & Canteens posted a full-year loss of only £627,000, compared with a profit of £13.1m in the year-earlier period, largely because of costs related to the sale of the Watling Street Inns unit and the trade sales business.
Activity in the US eventually ended down, dragging the S&P 500 Index to its lowest since September 26 by pharmaceuticals and financial firms.
Abbott Laboratories said earnings will miss forecasts and Merck & Co. signalled the introduction of a new painkiller will be delayed.
Abbott Laboratories tumbled $7.37, or 16%, to $38.30 while Merck & Co fell $2.42 to $51.88, knocking theS&P 500 down17.14 points, or 1.7%, to 1013.60.
The Dow Jones Industrial Average slid 128.14, or 1.3%, to 9517.26 while the Nasdaq Composite Index shed 33.51, or 2.2%, 1497.18.
However, 10% of the S&P500's decline was because of financial firms. New York Attorney General Eliot Spitzer, who is said to be investigating Morgan Stanley Dean Witter & Co. and Salomon Smith Barney, said he's finding conflicts of interest between consultants and M&A teams, at firms other than Merrill Lynch & Co.
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