The UK market struggled to find a direction yesterday, with old economy sectors showing modest signs of outperforming the new economy stocks.
The FTSE 100 index closed down 31 at 5,840.3 but there were gains for both the 250 and SmallCap indices. Investors appeared to be pausing for breath, after seeing the Footsie rally more than 400 points since mid-March.
But the shine was taken off some of this economic optimism by confirmation that Motorola, the mobile phone manufacturer, is to shut its Bathgate plant with the loss of 3,000 jobs.
Wall Street managed to shake off weak US consumer confidence data and some gloomy figures from Lucent, JDS Uniphase and Compaq Computer.
After an hour of trading, the Dow Jones Industrial Average had gained 100 points on hopes that the Federal Reserve would move to cut rates again in May. That helped Footsie regain some of its lunchtime losses but as the Dow gave up some its opening gains, the bluechip benchmark inched lower once more.
Technology stocks were generally in the red with Logica, Sage and Misys among the worst five performers in the FTSE 100. The Techmark 100 index fell 34.52 to 1,928.18.
The main corporate news came from Reuters, the information group. A rather cautious statement from Peter Job, the chief executive, kept the shares under pressure, making them the third worst performers in the FTSE 100.
Figures from GlaxoSmithKline were also greeted unenthusiastically by the market and with Vodafone and BP losing ground, Footsie's three biggest stocks were in negative territory.
Gareth Williams, UK strategist at ABN Amro, said the UK market had been "establishing a reasonable footing so that it can make progress later in the year. As long as uncertainty over the US economy is still present, progress will be slow. But there is a general perception that markets have discounted the worst and that we are not going to go into a global recession. UK equities are cheap relative to bonds and earnings will not be as bad as people think."
