Leading shares have turned negative again after some poor figures from US giant General Electric sent Wall Street futures lower.
GE reported an unexpected 6% drop in first quarter profits and lowered its forecast for the year. The news reignited fears about the depth of the US downturn.
So after a bright start, the FTSE 100 is now down 25.9 points at 5939.2. However this has been a rather less volatile week than of late, and the leading index is just 10 points lower than it opened on Monday. Things could change later, of course, if Wall Street takes real fright at the GE numbers.
And next week could also prove testing.
Ryan Kneale, market analyst at City bookmakers BetsForTraders.com, said: "It would appear that traders are now waiting for the next round of news, but whether it is good or bad remains to be seen. For now the markets are calmer, but there is a large number of companies still to report quarter one earnings. We are hoping at this point all skeletons are already out of the proverbial closets.
"Looking ahead at the macro economic data released next week - the standout announcement is the UK inflation figure on Tuesday 9:30am. With the Bank of England forced to cut rates during the last week, the only thing stopping the central bank from making more aggressive rate cuts is inflation. Inflation has come in above the Bank's target rate of 2% consistently over the last few months and we expect it to do so again.
"A barrage of first quarter earnings reports are released next week with Intel, Johnson and Johnson and Tesco on Tuesday. IBM and JP Morgan Chase on Wednesday. Google, Merrill Lynch and Prudential on Thursday and Caterpillar and Citigroup on Friday. We are expecting a much more volatile week with traders switching their attention to the earnings of the investment banks, where more write-downs are expected. It is however the size of the latest round of write-downs that will dictate market direction with worse than expected figures driving the markets down and vice versa."
