Home Builders Lead UK Decliners

123jump.com Staff
05 Feb, 2008
New York City

UK stocks fell after the new worries related to the U.S. economic growth hobbled the markets in the U.S. and Europe. Home builders and retailers fell with the market. Of the 102 FTSE 100 stocks Shire Plc led advancers with a rise of 0.85% followed by rises in Scottish & Newcastle of 0.19% and in BP Plc of 0.18%. Net income at British Petroleum in 2007 fell 5.5% on 6.2% rise in revenue. Taylor Wimpey led the decliners in the index with a fall of 8.1%.

[R]1:00PM New York, 6:00PM London – Stocks in the UK fell after the worries of the U.S. economic slowdown resurfaced.[/R]

Stocks in London fell sharply after a U.S. report showed that business activity in the non-manufacturing sector fell for the first time in 58 months. The report sparked speculation that the U.S. recession may arrive faster than expected.

In London trading FTSE 100 fell 2.63% or 158.2 to 5,868.

Of the 102 FTSE 100 stocks 3 rose, 98 declined, and 1 was unchanged. Taylor Wimpey led decliners with a drop of 8.12% after HSBOS downgraded homebuilders.

Other homebuilders fell as well. Home Retail Group slipped 6.48% and British Land Co. shed 4.76%.

The U.S. Institute for Manufacturing reported today on its web site in its January 2008 Report On Business that business activity in the non-manufacturing sector fell in January for the first time in 58 months.

According to the report, the New Orders Index fell the most since October at 43.5% and the Employment Index contracted the most since February 2002 at 43.9%

“The overall indication in January is that non-manufacturing has come to the end of a long-term period of growth and has contracted for the month of January,"" read part of the report.

Of the 102 FTSE 100 stocks Shire Plc led advancers with a rise of 0.85% followed by rises in Scottish & Newcastle of 0.19%, and in BP Plc of 0.18%.

BP Plc rose after the company reported quarterly earnings rose 53% to $4.406 billion from $2.88 billion a year ago. The company also increased its dividend payout to 13.5 cents from 10.3 cents a year ago. The full year 2007 earnings fell 5.5% to $20.8 billion on 6.2% rise in sales to $291.4 billion. The management also confirmed plans to eliminate 5,000 jobs in the next eighteen months.

Taylor Wimpey led decliners in the FTSE 100 index stocks with a decline of 8.12% followed by losses in Kingfisher of 7.81%, in Persimmon of 7.34%, in Next Plc of 7.16%, and in Schroders Plc of 7.07%.

Homebuilders declined after a brokerage HSBOS downgraded its rating on the industry and noted that the outlook in the industry is bearish.

Reuters news online reported today that Australian Prime Minister Kevin Rudd said the move by China to become the largest shareholder in Rio Tinto Plc may warrant an investigation under the country’s foreign ownership.

Rinto Tinto closed down 1.68% and BHP Billiton fell 3.15%, which has to decide tomorrow on its formal offer for the Australian mining company.