Footsie dips after poor US job figures

LONDON'S Footsie finished in the red for a second straight session yesterday following a mixed report on the US jobs market. Closely-watched government data showed the US unemployment rate fell to its lowest level in almost two years last month, but fewer jobs were created than expected.

The FTSE 100 index closed 35.18 points - or almost 0.6 per cent - lower at 5,984.33 as investor caution surrounding the American jobs data prompted a bout of profit-taking.

Looking ahead, David Jones, the chief market strategist at IG Index, said: "Next week sees a slew of United Kingdom retailers due to announce Christmas sales figures and it wouldn't be a surprise to see a cautious tone resurface when the markets open."

The US jobs figures - a key indicator of the health of America's economy - showed the unemployment rate falling to 9.4 per cent, while a net total of 103,000 jobs were created last month, which was less than the 150,000 pencilled in.

Wall Street's Dow Jones Industrial Average fell more than 40 points in early trading following the report, while Federal Reserve chairman Ben Bernanke also said in a statement to the Senate Budget Committee that it will take years for high employment to come back.

The US jobs news knocked the strength of the dollar, while the pound enjoyed gains against most major currencies. Sterling rose to $1.56 and €1.20.

Among London stocks trading lower, miners retreated with silver specialist Vedanta Resources down 46p to 2,448p.

Arm Holdings - which was Thursday's big riser after Microsoft said it would run the latest version of its Windows software on Arm's microchips - surrendered some of its gains to end the day 22.4p lower at 459.6p, a drop of 5 per cent.

One of the bright spots of the session came from the retail sector after sportswear chain JD Sports Fashion maintained its recent run of forecast-beating updates.

Despite the disruption caused by the snow in December, JD said like-for-like sales at its UK stores, which include 350 JD Sports and Size outlets, were up 2.5 per cent in the final five weeks of 2010.

The company also revealed that profits for the year to 28 January will exceed City expectations of 75.4 million.

JD shares added a further 3 per cent or 29.5p to 895p, while rival Sports Direct International gained 3.1p to 168p.

It was a better day for many high street players, with Next and fashion group Burberry ahead in the top flight by 13p to 2,087p and 6p to 1,127p respectively.

B&Q owner Kingfisher was up 3.1p to 263.6p after suffering earlier this week following snow-hit sales reports from a swathe of retailers.

In the FTSE 250, tour operator Thomas Cook dropped 3.2p to 197.2p after news that the planned merger of its high street business with the Co-operative had been referred to the Office of Fair Trading.

But budget airline EasyJet was on the rise, ahead 19p to 474p, as the market reacted well to December traffic figures seen as robust given the snow disruption. The carrier sold 7.6 per cent more seats in December than the same time a year earlier.