Market report: Friday close

HIGH Street lender

The shares soared 18 3/4p to 500p, having briefly touched 535p, as a whopping 180m shares changed hands.

Dealers say there is no smoke without fire and talk of a 700p-ashare bid from the US outfit should be taken seriously. Citigroup is already on record as saying it wants a bigger presence in the UK. It is rumoured that the two sides have talked in the past and that a 600p-a-share offer was rejected by the Barclays board.

Brokers say the heavy turnover suggests 'Harry Hedge Fund' has become involved and will be talking the price higher. Neither side would comment today with Barclays midway through a share buyback programme.

Only yesterday, Barclays impressed the market with interim pre-tax profits of £2.4bn, around £200m more than the most optimistic brokers' forecast.

If the two sides have started talking again, they will not have far to travel. The companies are headquartered next door to each other in Canary Wharf - their skyscraper buildings are a big feature on the London skyline.

Share prices generally fell sharply, undermined by a grim set of US job numbers which paved the way for the Dow to extend yesterday's sharp fall in early trading on Wall Street this afternoon. In London, the FTSE 100 index fell 69.50 points to 4343.90.

Online travel companyLastminute dived 8 1/2p to 98 1/2p as a further 29m shares were traded. That is its west since June 2002 and follows yesterday's dramatic sell-off by stockbroker Cazenove of 18m shares, or 5% of the company, at a heavily discounted 95p. The sellers were institutions and may have included Deutsche Bank and Fidelity Investments.

Earlier yesterday, the price touched 140 1/2p after the group reported a 40% widening of pre-tax losses to £17m despite a big rise in turnover. It also revealed proposals to shed 350 jobs, the closure of 10 offices and plans to spend more on marketing. The price is down 37 1/4p on the week.

A two-way tug has developed in publisher Reed Elsevier, 10p cheaper at 471p, after yesterday's uninspiring interim results. Broker UBS has upgraded from neutral to buy with a 580p target, but US securities house Lehman Brothers has repeated its underweight rating and 490p target.

Meanwhile, the sound of the stable door slamming shut could be heard at healthcare group Smith & Nephew following yesterday's trading news.

It rallied 9p to 490p, but the two-day loss is still 45 1/2p. Deutsche Bank has slashed its 12-month forecast from 650p to 600p and reduced its earnings forecast by between 4% and 6% from now until 2006. UBS has lowered its sights from 600p to 550p but keeps its neutral stance. Merrill Lynch remains neutral and has reduced its forecast for net income by almost 4% to £172m, warning lower sales and currency losses will mean the group cannot achieve its targets for 2004.

Osmetech, the manufacturer of 'electronic nose' sensors for healthcare applications, is branching out into the veterinary market after signing a deal with IDEXX Laboratories, which specialises in animal health diagnostic products. The shares slipped 0.05p to 4.07p.