1:00PM New York, 6:00PMLondon – Business survey of UK businesses predict tougher market conditions for the next six months.

Stock in U.K. fell on sell-off of homebuilders and retailers after analysts and reports projected revenues might decline.

In London trading FTSE 100 index declined 0.2% or 12.80 to 6,335.70.

Of the 102 FTSE 100 index stocks, 30 gained, 70 declined, and 2 were unchanged. British Energy led advancers rising 6.04% after JP Morgan Chase raised the price estimate on the stock from 660 pence to 730 pence.

The Confederation of British Industries revealed in the Financial Service Survey, jointly prepared with PricewaterhouseCoopers, listed on its Web site today that business conditions deteriorated in the last quarter of 2007, the fastest since March 1991. However, the IT industry managed to increase profitability over the review period and is still hiring staff and planning to invest more.

According to the Survey, firms will continue to witness weaker market conditions in the next three months, though at a slower rate. Demand from individual consumers is also expected to stabilise in the coming six months.

Profitability at banks fell sharply, while fund managers and insurance brokers “fared much better”. Business sentiment among financial institutions also worsened in the quarter to December.

“Despite this, firms reported a surprise fourth consecutive quarter of growth in profitability (a balance of gain of 6%, slower than last survey''s gain of 14% but better than the predicted loss of 14%), although this is not expected to continue into early 2008.” The press release said.

Banks earnings will be limited by rising funding costs and late payment on loans after a record drop in revenues in the three months to December.

In a further sign of the impact of the credit squeeze, a survey-record proportion of financial services firms (24%) felt that their ability to raise funds would be a constraint on their growth over the next 12 months. This was a particular concern for building societies, with 92% of respondents from that sector flagging it as an issue. A record high of 36% of banks were also concerned that fund raising ability would constrain expansion.

Of the FTSE 100 index shares British Energy led advancers with a rise of 6.04% followed by gains of 3.53% in GlaxoSmithKline Plc, 3.38% in Smith & Nephew, 2.84% in AstraZeneca, and 2.33 in National Grid Plc.

Taylor Wimpey led the decliners in the FTSE 100 with a drop of 7.32% followed by losses of 6.98%, in Schroders Plc, 6% in Intercontinental, and 5.96% in Xstrata Plc.

Other homebuilders fell as well after Dresdner Kleinwort analyst Alastair Stewart urged investors to sell homebuilders on the expectations of weak earnings. Persimmon fell 5.52%.

Retailers fell on negative reports of earnings projections. Sainsbury fell after the Times newspaper reported that the company might not be able to realise profit targets for the Christmas period. The stock closed down 3.58%.

Marks & Spencer also plummeted after The Sunday Times reported that the retailer might report its worst Christmas sales figure for two years. Marks & Spencer dropped 3.76%.

Next Plc tumbled 4.64% and Kingfisher dropped 5%.

Commodity stocks also edged lower as global economic outlook deteriorated on the expectations that world economic slow-down will lower the demand for commodities. Anglo American Plc slipped 4.70% and BHP Billiton slumped 3.31%.

Balfour Beatty said today the company has won a 350 million pound order from BAA Limited to expand facilities at Heathrow Airport. Heathrow’s Terminal 5 is scheduled to open in March 2008 at a cost of 4.5 billion pounds.


12:00AM New York – U.S. stocks trade sideways. MasterCard and MSCI stocks fell sharply again.

Dow Jones Industrial Average edged 7.31 higher to 12,807.25, Nasdaq declined 3.21 to 2,501.44, and S&P 500 rose 2.74 to 1,414,39.