Disappointing blue chip results sends FTSE falling

| February 8, 2008 | 0 Comments

Yesterday afternoon’s trading saw the FTSE fall even further after blue chips issued poor results.

GlaxoSmithKline warned that falling sales of its key Avandia diabetes drug, together with increasing competition from copycat drugs in the US, would knock about 5% off its earnings in 2008. The pharmaceutical giant was down 7%, wiping £4.5 billion off its market cap - its lowest level for almost 4 years.

Furthermore, Yell plummeted to its lowest level ever after it warned that fourth quarter advertising sales in its UK Yellow Pages directories had suddenly declined in the new year, leaving it to expect sales to be down 9% in the first quarter of 2008.

Merrill Lynch said the Yell.com figures were disappointing since strong revenue and profit growth masked deteriorating numbers of searchable advertisers and unique users, amid growing competition.

BT and Rolls-Royce announced disappointing results sending the FTSE plummeting. Rolls-Royce fell 7% to 448p hit by a lower than expected dividend cautious outlook statement in which it mentioned a ‘competitive and challenging environment’.

The cut in interest rates from 5.5% to 5.25% was expected by the market so had little impact on the FTSE.

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