London shares close lower off highs; NY down; DSG International falls

London shares close lower off highs; NY down; DSG International falls

	Published : Thu, 18 Oct 2007 16:38 By : Agencies Print this Story

LONDON (Thomson Financial) - UK blue chips closed lower off highs as Wall Street remained lower with interest rate sensitive sectors such as retailers bearing the brunt of the falls with a disappointing update from DSG International helping to weigh down the FTSE 100.

By the close, the FTSE 100 index was down 68.3 points at 6,609.4 off a low of 6,584.9 and a high of 6,722, while the FTSE 250 index lost 126.4 points to 11,411.6.

'The market is going through a rethink with investors starting to realise it is not likely central banks are going to cut interest rates quickly with signs the US and UK economy are still growing,' said Darren Winder, strategist at Cazenove.

'Interest rate sensitive stocks are starting to reverse with retailers and housebuilders falling,' added Winder.

Looking at Wall Street, stocks fell in early trading after Bank of America missed analysts' earnings expectations and provided investors with further evidence of how the credit crisis has affected the economy.

Bank of America, considered a bellwether for the banking industry because it has branches across the country, said 'significant dislocations' in the capital markets caused third-quarter results to fall 32 pct. The disappointing results follow similar reports from other financial companies including Citigroup and Washington Mutual.

At London's close, the Dow Jones industrial average was down 35.5 to 13,857.

Broader indexes were also lower. The Standard & Poor's index fell 6.57 to 1,534.56 while the Nasdaq composite index was down 13.22 at 2,779.33.

Turning to UK equity news, DSG International was the heaviest faller, down over 8 pct, or 11.9 pence, to 124.1, after the group warned first-half earnings would be down year on year in a trading statement.

The company said that margins at PC World were hit by a reduction in laptop stocks arising from disappointing sales of Vista-related products and a changing sales mix.

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