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Market forces: Investors reluctant to chance Arm for fear of chip glut(Guardian (UK) Via Acquire Media NewsEdge) As leading shares ended the week down sharply after a cocktail of bad news, one big faller was the technology firm Arm Arm, which designs chips for tablet computers and smartphones, fell 26p to 611p on worries of a slowdown among important customers after a profit warning from South Korea's LG Electronics. LG said it was seeing weaker demand for smartphones and cut its 2011 target. JP Morgan Cazenove warned of rising stockpiles of semiconductors: "Our analysis of semiconductor inventory at the end of the first quarter of 2011 indicates that [it] increased quarter on quarter and was 8.8% above the three-year seasonal average." Fears of a global downturn were exacerbated by worse than expected US jobs figures. The widely watched non-farm payroll numbers showed an 18,000 rise in jobs in June, compared with expectations of more than 100,000. Worries about the eurozone debt crisis spreading further afield also unnerved investors. So after climbing to 6084, the FTSE 100 finished 63.97 points lower at 5990.58. Wall Street was about 120 points lower by London's close. Mining shares fell back as base metal prices lost ground on concerns about slowing demand. Antofagasta fell 67p to pounds 14.24, while Kazakhmys closed 53p lower at pounds 13.52, and Vedanta Resources fell 88p to pounds 19.73. Bank shares came under pressure ahead of results of the latest eurozone stress tests next week. On top of that, Italy became the latest country to come under the debt spotlight, not helped by reports that its economy minister, Giulio Tremonti, had been drawn into a corruption scandal. Lloyds Banking Group lost 1.71p to 46.56p; Royal Bank of Scotland fell 1p to 37.21p, and Barclays dropped 8p to 243.25p. Perhaps not surprisingly the biggest faller in the leading index was BSkyB. The satellite broadcaster lost 62p to 750p - a decline of nearly 8%, which knocked three points off the leading index - as doubts grew over its proposed takeover by News Corp in the wake of the News of the World hacking scandal. There were some bright spots, with Marks & Spencer up 2.3p to 378.9p on hopes of a positive trading update next week. Next also benefited, 12p better at pounds 24.10, as did Primark owner Associated British Foods, which rose 18p to pounds 10.92. Imperial Tobacco rose 14p to pounds 21.67 on growing hopes of an end to a Spanish cigarette price war, which has hit the company's financial performance. Last week Imperial decided to raise its prices in the country again, and analysts were waiting to see if rivals followed suit. It now appears that Philip Morris has indeed fallen into line with Imperial. Among mid-caps, Spirent, the telecoms testing company, slid 7.5p to 143.3p on profit warnings from two US rivals, Ixia and Aeroflex, while Betfair fell 39.5p to 682p as UBS and Espirito Santo both issued sell ratings on the betting exchange after its recent results. Finally, Bovis Homes finished 5.2p lower at 443.3p after a disappointing trading update. The housebuilder said its legal completions in the first half were virtually flat at 801 homes (compared with 803 at the same point last year). [email protected] (c) 2011 Guardian Newspapers Limited. |