City sees more trouble ahead
SHARES in London stabilised following Thursday's drubbing as dealers stuck to the sidelines ahead of key data which should provide further clues on the state of the US economic recovery.
The FTSE 100 index was up 16.1 points to 4060.6 but the market was expected to turn more volatile later in the session. Thursday's plunge wiped £48bn off the value of leading shares and marked a sharp reversal for the Footsie after a 12% rally in the previous six sessions. A wave of disastrous US data raised fears that America could be heading back into recession.
Today sees the all-important nonfarm payrolls report. Wall Street pundits predict 69,000 new jobs will have been created in July against 36,000 in June. However, a disappointing number could lead to a sharp shares slide. 'We are expecting a difficult session,' said Tom Hougaard at financial bookie City Index.
The City appeared to shrug off the latest development in the corporate scandals sweeping America. Two former WorldCom executives were arrested last night on criminal charges stemming from the $3.8bn (£2.6bn) accounting fraud that prompted the telecoms group's collapse.
