It has been another painful day for investors, with leading shares falling to their lowest level since the end of August.
The latest disaster at Northern Rock set the early tone, but the real crunch came when Wall Steet opened. US shares slumped after Goldman Sachs issued a sell note on rival Citigroup, suggesting it might have to write off up to $15bn of toxic loans. Goldman of course has made no secret of the fact it has avoided most of the sub-prime related problems suffered by its peers, and now seems to be indulging in a little shadenfreude.
On top of that, a major US home improvement chain, Lowe's, cut its profit forecast for the year, prompting more worries about the current state of the American economy ahead of the forthcoming Thanksgiving shopping weekend.
So with the Dow Jones Industrial Average down around 170 points by the time London closed, the FTSE 100 lost 170.4 points to 6120.8 points. The last time it was this low was on August 28.
With low ball bids, government statements and bear raiders, Northern Rock fell 28.4p to 104.2p, a new nadir. Other banks were also under the cosh after another jump in three month Libor and rumours of funding difficulties.
In fact only three companies in the 100 index ended in positive territory. Standard Chartered closed 15p higher at £16.79 on talk of Chinese interest, Unilever was 13p better at £17.96 as it bought back shares, while medical equipment group Smith & Nephew ended 2.5p higher at 575p. S&N benefited from the £935m takeover of smaller rival Gyrus by Japan's Olympus, a deal which suggested its shares could be re-rated.
