London shares outlook Lower as Nasdaq finishes weak, Intel warning to hit

LONDON (AFX) - Leading shares, which saw such stellar gains at the start of the week, could end the week on a much more subdued note, hit by renewed weakness in the Nasdaq overnight and growth warnings from U.S. behemoths, Intel and National Semiconductor, dealers said. Overnight, Intel delivered yet another profits alert, while National Semi cautioned that its fourth quarter estimates may fall short of estimates -- even though its third quarter results came in above the market consensus. In after-hours trading, Intel shares fell 8.4 pct. Early indications from spread betting firm IG Index suggest the FTSE 100 index will open around the 5,983-5,911 level. Last night, the FTSE 100 index finished just in positive territory, up 1.4 points at 6,003.2. Overnight, the Nasdaq ended down 55.10 at 2,168.82, though the DJIA put in a strong performance on the back of "old economy" gains -- up 128.65 at 10,858.25. In Asia, the tone was weaker -- though investor interest was relatively subd ued ahead of this afternoon's key U.S. employment data. The Nikkei 225 index closed at 12,627.90 points, down 22.66 points, while the Hang Seng index ended the morning session at 14,181.18,down 27.77 points. The weak performance on Nasdaq overnight is set to weigh in early trading, with some fearing that tech and telecoms -- which had driven the wider market higher at the start of the week -- could fall under renewed pressure after further earnings caution from some of the U.S. giants overnight. But the real focus in trading today will undoubtedly be the release of U.S. February employment data, which the market will be closely watching for any indications of how much the Federal Reserve may cut interest rates at the next FOMC meeting on March 20. February's U.S. non-farm payroll report is forecast to show an increase of 95,000 jobs, compared with January's 268,000 increase. U.S hourly earnings in February are expected to rise 0.3 pct. On the domestic front, the market will be looking at this morning's UK industrial production for January, and the UK manufacturing output data. Among early news, Autonomy could buck the weak tech trend after it revealed new contracts with Nortel, Telecom Italia, and MCI Worldcom. Pubs group JD Wetherspoon is set to push higher after top of the range interim results, with the group also positive on the success of its new food and beverage offers -- which it believes will be key to future growth. Property developer Canary Wharf is also seen higher after very strong first figures, while Wolverhampton & Dudley could see further gains after it extended its bid deadline to April 20 -- prompting hopes that there is more than one party interested in bidding for the group. Goodman Fielder is set to be active after it detailed the findings of its recent strategic review, including the separation of its non-retail operations -- which will be run more aggressively for cash. But Collins Stewart could move back amid talk that a leading short seller has built up a large short position in the stock in the spread betting market. Hay & Robertson could attract fresh speculative buying as break-up talk did the rounds, with some suggesting that the sum of the parts may be significantly higher than its current share price. Abbey National and Lloyds TSB are set to remain in the spotlight after yesterday's OFT report, which many see as lengthening the odds of Lloyds winning clearance of its 18 bln stg bid for its smaller rival. Other banking stocks could also see an early markdown after City regulators yesterday censured 15 British-based banks for flouting anti-money laundering rules.

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