High street chain Next suffered a battering on the London market today after it warned over disappointing trading throughout August and September.
The retailer closed 7% lower on the alert, while BAE Systems also lost 7% as initial excitement over yesterday's news of mega-merger talks with Airbus owner EADS turned to fears over the potential hurdles.
The wider Footsie closed 37.8 points higher at 5819.9 amid hopes that US policymakers will unveil a new round of emergency support when the Federal Reserve announces its latest decision, due after the London market closed.
Wall Street's Dow Jones Industrial Average was also higher ahead of the Fed announcement as investors bet there would be more quantitative easing (QE) in store for the world's biggest economy.
The expectation for more QE in the US continued to weigh on the dollar, with sterling up against the greenback at 1.61 dollars.The pound also rose to 1.25 euros.
Next's ominous trading warning put the group firmly in the spotlight and overshadowed news of a 10% jump in first half profits to £251 million.
The group said recent trading had been disappointing following an "unusually quiet" August and September, sending shares down 259p to 3320p.
Shares in BAE Systems were also at the bottom of the FTSE 100 Index after the group yesterday confirmed talks over a potential merger with Airbus aircraft manufacturer EADS to create the world's biggest aerospace and defence company.
The statement triggered a 11% surge in the share price yesterday, but the stock slipped 26.5p to 337.1p amid fears over the political, regulatory and business hurdles the merger may face.
But chipmaker ARM Holdings made gains after Apple impressed investors with the iPhone 5, which uses ARM technology. ARM's shares were 7p ahead at 562p after Apple's shares closed nearly 9% higher last night and were 8% higher today.
Telecoms giant BT was 1% higher as households discovered the group is to hike its prices from January 5 next year, with phone calls, line rental and broadband rising by up to 5.9%.
The price rise revelations come after BT agreed to pay £738 million for the rights to 38 Premier League football matches a season for three years amid fears it vastly overpaid. Shares were 1.6p higher at 236.8p.
Outside the top flight, Argos owner Home Retail Group fell nearly 5% despite a robust 1.4% rise in like-for-like sales at the catalogue chain.
However, Homebase, its home improvement and garden centre chain, reported a near 4% slide in same-store sales. Shares were down 4.6p at 94.9p.
Out-of-town homewares chain Dunelm enjoyed a 5% lift to its share price after it rolled out a 15% jump in profits.
The group, which has 127 stores and has a long-term target for as many as 200, described its performance as robust after revenues rose 12% to £603.7 million and pre-tax profits hit £96.2 million in the year to June 30. Shares added 34p to 659p.
The biggest Footsie risers were Rolls-Royce up 25.5p to 854p, Vodafone ahead 3.4p to 177.4p, BG Group up 23.5p to 1263p and Resolution up 4.1p to 221.4p.
The biggest Footsie fallers were BAE Systems down 26.5p to 337.1p, Next down 259p to 3320p, Evraz off 9.6p to 259.4p and Vedanta Resources down 24p to 961.5p.
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