Market report: Wednesday close

ALL eyes were focused on the other side of the Atlantic today as trading ground to a near standstill in the City ahead of Federal Reserve chairman Alan Greenspan's crucial US interest rate announcement.

After gaining 29 points early on, the FTSE 100 index slid back to stand only 7 points ahead at 4067.9 in a lacklustre session dominated by talk about what is arguably the most important rate-setting decision this year.

With a growing belief that the global economy is beginning to awake from last year's slumber, dealers are worried a Fed cut of half a percentage point will send out the wrong signals and shatter the market's newfound confidence.

The Footsie has already lost more than 100 points since last week's impressive nine-month high of 4219 and analysts believe another damaging sell-off could be around the corner if the bears are given much more of a reason to move in. Some 2.1 billion shares had changed hands in London as trading got off to a subdued start on Wall Street.

Electrical goods retailer Dixons provided one of the few sparks as chief executive John Clare's optimistic outlook overshadowed poor full-year figures and sent the shares rocketing 19 3/4p, or 17.67%, to 131 1/2p.

Its rivals benefited from the group's confidence about future growth rates and Kingfisher moved up 8 3/4p to 272 3/4p while Argos parent GUS climbed 21p to 671p.

Morgan Stanley lent its support to Luqman Arnold's attempts to breathe new life into mortgage bank Abbey National by raising its price target on the stock to 526p from 497p on the back of last week's trading update. Abbey rose 7 1/2p to 479 3/4p.

But Standard Chartered failed to attract support despite shrugging off the effects of the Sars virus on its Hong Kong business and sticking to annual profit forecasts in a trading update. It dipped 5 1/2p to 749 1/2p.

Numis Securities reiterated its buy stance on supermarkets target Safeway and said yesterday's Competition Commission update on its thoughts about the bid process should be a green light for investors to start bagging the shares on the cheap.

Safeway, down 3 1/2p at 256 1/2p today, fell 5% after the Commission's remedies letter came out but Numis believes the regulator is preparing not only to clear the offer from one trade buyer - Morrisons - but also larger rivals such as Tesco.

Resurgent housebuilders dominated proceedings among smaller stocks after Persimmon gave a muchneeded boost to the sector by forecasting its first-half figures will be 20% ahead of last year's. Its shares rose 24p to 487p and the positive outlook dragged up its competitors - Westbury was 9 1/2p higher at 371p and Berkeley was up 25p at 720p ahead of its final results tomorrow.

JJB Sports tumbled 14% as it emerged the retailer has shut the door on a possible 220p per share buyout by chairman and founder Dave Whelan. The shares plunged 30p to 186p.

Elsewhere, Marconi revealed that Cerberus, the US investment fund that lost out in the battle for Cordiant, has sold down the shareholding it acquired in the group's restructuring last month to 3.98% from 4.7%. Marconi's shares were unharmed, moving up 1 1/4p to 60p.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.