http://uk.news.yahoo.com/010302/80/b99ht.html

Friday March 2, 05:07 PM

FTSE 100 closes at two-year low as Nasdaq falls

LONDON (Reuters) - The FTSE 100 has tumbled to its lowest close in two years as fresh U.S. corporate warnings battered already frail sentiment, with bank stocks leading the retreat.

The benchmark index ended down 50.0 points or 0.85 percent at 5,858.6, in the third consecutive day of losses. It was the weakest close since February 10, 1999 when it slipped to 5,770.2 and amounted to a 15 percent slide from end-1999's all-time high.

"Once again the market has been hit by profit warnings out of the States and sentiment is extremely poor," said Commerzbank strategist Michael O'Sullivan.

"Investors are happy to hold cash at the moment and in the short-term there are not many catalysts for the market," he said.

The biggest blue-chip loser by far was software maker Autonomy, sliding 12.9 percent amid expectations that it will be voted out of the FTSE 100 next week.

The latest triggers for selling pressure were profit warnings from software firm Oracle and telecoms company SBC Communications, which pushed the U.S. tech-heavy Nasdaq down three percent.

Much of the damage was done by the banking sector, giving up gains a day earlier and wiping some 25 index points from the FTSE 100. HSBC alone eroded nine points as it fell 2.5 percent, while Lloyds TSB shed 3.1 percent and Barclays weakened 2.4 percent.

Few sectors escaped the gloom, with telecoms and oils among those in the firing line. Index heavyweight BP Amoco slipped 1.3 percent, mobile phone firm Vodafone fell 0.8 percent and Cable & Wireless retreated 4.5 percent.

FTSE 100 losers outnumbered gainers by three to two and market volume was a moderate 1.8 billion shares by the 1630 GMT close, when the Nasdaq Composite was 65 points lower and the blue-chip Dow Jones industrial average was down 80 points.

-- (M@rket.trends), March 04, 2001