In the UK the FTSE 100 Index of leading shares declined 21.90 points, 0.5%, to 5320.10 today led by BP and Royal Dutch Shell.
BP dropped 8p or 1.2% to 638.5p while Shell retreated 32p, or 1.8%, to 1,822p.
Cable & Wireless fell after agreeing to pay as much as $1.2bn for Energis to expand its services and add customers. Britain's second-biggest phone company fell 6.75p, or 4.3%, to 156.75p. The company will pay £594m in cash and up to £80m more in shares or cash in three years for Energis, which sells phone and Web services, to gain customers including Tesco and International Business Machines Corp. Meanwhile US stocks appear to have fallen in sympathy with the UK markets, the Dow Jones Industrial Average falling 69.01 pints, or 0.7%, to 10,565.37 in morning trading after Wal-Mart, Deere & Co. and Gateway cut their annual profit forecasts.
Wal-Mart, the world's biggest retailer, had the steepest decline in the Dow Jones Industrial Average as it blamed record gasoline prices for crimping consumer spending. The retailer slid $1.70, or 3.5%, to $47.40 after saying it expects full-year profit of $2.63 to $2.70 a share. In May, it forecast earnings of as much as $2.74.
Average retail prices for petrol in the US are 36% higher than a year ago. The price yesterday reached a record $2.524 a gallon, according to the AAA. Crude oil for September delivery, which touched a record $67.10 a barrel last week, today appears to be calming down at $66.08 a barrel in New York.
Deere slumped $6.41, or 8.8 percent, to $66.40 the world's largest maker of farm equipment said third-quarter profit was $1.58 a share, less than the $1.90 analysts expected. Deere reduced its full-year earnings forecast this morning to $1.4bn from $1.6bn.
And other makers of heavy equipment declined. Caterpillar Inc., the world's largest maker of earthmoving equipment, lost $1.12 to $54.14. Terex Corp., which makes heavy-duty trucks and construction equipment, dropped $1.73 to $49.12.
Gateway, the US personal-computer maker, tumbled $0.72, or 19%, to $3.17. The company forecast 2005 profit, excluding some costs, of $0.13 to $0.15, less than its previous prediction of $0.17 to $0.19. Sales this year will also fall short of its previous forecast., it said.IFAonline
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