Market report: Thursday close

SHARES dipped for the second day running as gloomy corporate news and concern over possible interest rate rises hammered stocks.

The FTSE 100 index fell a further 45.4 points to 4240.2 today, extending losses in two days. The decline followed sharp falls in Asian markets overnight.

Things seem to be going from bad to worse at infrastructure services group Jarvis, the biggest faller among second-liners today.

Its shares tumbled 47p, more than 16% to 240 1/2p following allegations it certified that work on sections of rail track on the West Coast mainline had been completed when, in fact, it had not.

Network Rail said it had launched an inquiry following the accusation, which has been fiercely denied by Jarvis directors.

The complaint centres on track sections between Macclesfield and Stoke-on-Trent that have caused speed restrictions on Manchester to London trains. Sections had not been properly stretched to cope with severe weather conditions, and this might have led to them breaking, it is alleged.

Jarvis was also berated following two derailments on the London Underground over the weekend, lambasted for its involvement in the fatal Potters Bar crash and recently withdrew from several Network Rail contracts because of the damage such work was doing to its reputation.

Meanwhile, so much for the bull market. Share prices around the world were left nursing some thumping losses today as institutional sellers made their presence felt.

Disappointing third-quarter profits from several leading US companies set the tone for other financial markets.

Overnight, the Dow tumbled almost
150 points and was followed lower by the Nikkei 225 in Tokyo and the Hang Seng in Hong Kong. London traded above its worst levels, but the FTSE 100 index was still nursing a fall at the close. Wall Street posted modest gains after a nervy start this afternoon.

It was all bad timing for Abby Joseph Cohen, the millions-of-dollars-a-year guru of US securities house Goldman Sachs.

They rolled out the red carpet for her in the City yesterday so she could tell us Brits we are in a major bull market that will take share prices from strength to strength next year. She got it right once, so let's hope she can repeat the trick.

The Yanks remain eternal optimists. They have been preaching the prospects of a stock market revival on Wall Street in the fourth quarter, bolstered by some big profits from blue-chip companies.

Traders in London remain unconvinced and the growing threat of a rise in interest rates before Christmas has only added to their gloom.

ICI fell 5 1/4p to 179p after falling out of favour with Merrill Lynch and CSFB, the latter setting a 155p target. Yesterday's credit downgrade by Moody's also hit home. Legal & General fell 3 1/2p to
103 1/4p in heavy turnover of 100m. A line of 30m shares, worth £31m, went through at 104p.

ML Laboratories firmed 1 1/2p to 30 3/4p after former chairman Stanley Leach placed his entire stake of 54.4m shares, or 34.4% of the company, at 25p. Granada fell 2p to 112 3/4p. We have still to hear the terms of the proposed merger with Carlton, down 3 3/4p at 210p, and there is talk that US arbitragers are preparing to sell.

Housebuilders, hit by yesterday's threat of higher interest rates, continued to suffer. Now broker ABN Amro is reckoned to have turned bearish. Bellway fell 13 1/2p to
621 1/2p, Berkeley 13 1/2p to 760p, Bovis Homes 20 1/2p to 440p, and Westbury 19 1/2p to 401p.

Invensys marked time at 31p, losing just 1/2p, after yesterday's sale of its US metering business for a lowly £388m.