Market report: Friday close

BIG falls on Wall Street last night and this afternoon ended three days of consecutive gains for blue-chip stocks.

The FTSE 100 tumbled 199 points, or 4.6%, to close at 4098.3, down 3% on the week. The Dow Jones kept sliding after London's final bell, with the index down 254 points, or 3%, at 8155.

Financials were among the FTSE 100 biggest casualties with Schroders down 34 1/2p at 495p, Legal & General off 7 1/4p at 114p and Friends Provident dropping 9 1/2p at 137 3/4p. But the despair even engulfed the usually defensive tobacco stocks, with British American Tobacco tumbling 45p, or 6.7%, to 609 1/2p and Gallaher down 38p, or 6.7%, at 526p.

Barclays led the banks down with a fall of 30 1/2p to 469p, while Lloyds TSB was down 29 1/2p at 592 1/2p.

Gloom swept in from both the Atlantic and North Sea as Microsoft disappointed and Ericsson issued a deeply discounted rights issue. Software group Sage slipped 5 1/4p to 139p, leaving telecom and tech stocks to absorb the rest of the impact. MmO2 slipped 1p to 47 3/4p, Vodafone fell 5 3/4p to 94 1/2p and BT was hammered down 16 1/4p - or 6.5% - to 232 1/2p.

Significantly, the tech-MARK index slid by 21.58 points to 773.47. All the other indices were in double-figure negative territory as the predicted Wall Street face materialised.

Smiths Group dropped UBS Warburg as joint brokers with CSFB and took on Cazenove, but its shares were hit by the techs fallout and gave up 26p to 774p.

Rolls-Royce had the added burden of having lost its finance director to FKI and the aerospace group's shares slipped 2 1/4p to 151 1/2p.

Oil shares were under pressure as talk emerged of Opec increasing production in the fourth quarter of the year. Shell, evicted from the influential American S&P 500 index because it is judged to be foreign, slipped 13 1/2p to 419p and BP lost 31p to 464 1/2p on hopes for its joint venture to strengthen its Deluxe film business.

Wolseley is expanding its specialist plastic pipes operation with a £23.5m purchase from engineer Glynwed of four of its pipe companies. Wolseley shares shed 10p to 580p.

The continuing retail boom made Marks & Spencer, up 2 1/4p to 350p, one of only two gainers in the FTSE 100. The other was hedge fund manager Man Group, up 19p at 1090p.

Outside the blue chip index, Fred Turok of LA Fitness joined the growing band of directors who have bought their own shares in the past week with the purchase of 20,000 at 171p each, taking his stake to 15.75% and boosting the shares 4p to 172 1/2p.

In the past three sessions, 66 company directors have bought shares in their own companies, with only eight selling. Outperforming the FTSE All Share index takes some doing but Project Telecom has managed it, extending the good performance today as the shares added 2p to 71p.

British Airways, down 5p at 158 1/2p, announced it was deepening its relationship with Spain's Iberia Airlines. The two airlines face steep competition from the no-frills sector, which has targeted Spain's major cities as well as holiday destinations.

Online travel set-up Cyberes will be funded through a £1.3m placing and open offer at 20p a share. Interim results showed increased turnover but deepening losses, and the shares fell 6p to 27 1/2p.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed in the tables. Ofex prices relate to the previous close.

The Daily Mail's Stephanie Bentley on yesterday's trade
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Today's gainers and fallers