Tour operator Thomas Cook has fallen 11.5% on concerns that consumers may postpone or abandon holiday plans.
Traders said this was sparked by comments from the head of Thomas Cook's German business, Peter Fankhauser, at a tourism fair in Berlin this week. He said January had been a very bad month for the company - whose German operation is second only to its UK operation. Although bookings had picked up recently, it would meet its summer sales targets only if last minute bookings came through. He added that the company planned to cut capacity because 2010 was shaping up to be even more difficult than 2009.
Thomas Cook tried to quell the market's fears by rushing out a statement saying its overall performance was in line with expectations, and it was well positioned for the future. A fuller trading update will be issued next Thursday ahead of its annual meeting. However this confidence did little to help the shares, which closed down 26.25p at 203.5p, while rival Tui Travel lost 14p to 226.25p.
There was another negative for Thomas Cook from the Berlin show, as German rival Rewe scotched reports it was interested in taking over the company. According to analysts at Cazenove, Rewe said: "An acquisition of Thomas Cook is not on the agenda for us at present. We have no firm interest in taking over Thomas Cook." Caz correctly suggested this would be a negative for Thomas Cook's share price.
Another big faller was insurer Aviva. It dropped 22.5p to 191p after a gloomy note from Citigroup analyst Andrew Crean, who suggested the company was one of the most at risk in the sector of needing a recapitalisation to bolster its balance sheet. He moved his rating from hold to sell and slashed his price target from 450p to 160p.
But Standard Life rose 11.5p to 172.8p after better than expected full year results and reassuring noises about its capital position. Friends Provident added 6.2p to 72.3p.
Overall the market reversed earlier losses after an opening rise on Wall Street, with the FTSE 100 ending 18.25 points higher at 3712.06 despite some mixed economic signals. China reported slowing industrial production, but a fall in US retail sales in February was not as bad as feared.
News that Standard & Poor's had cut General Electric's rating by just a single point - from AAA to AA+ - and set its outlook at stable was better than the market might have feared, and so was received positively. But David Buik at BGC Partners commented:
"I would like to see some solid proposals for the bank bail-out from [US treasury secretary] Tim Geithner that Congress would accept before acknowledging that the bottom of the market has been found."
The Chinese news led to renewed worries about future demand for commodities, helping to push mining shares lower. Xstrata dropped 20p to 326.25p, while Antofagasta fell 24.5p to 511p, additionally unsettled by analysts at Royal Bank of Scotland downgrading from hold to sell. They said:
"The stock has run some 29% in the past three weeks and now has 20% downside to our 2009 target price of 430p a share."
But Asia-focused bank Standard Chartered shook off concerns about the region's economy, adding 13p to 811.5p. New York based investment firm Gilder Gagnon Howe disclosed it had a 0.25% short position in the bank, while Morgan Stanley recently edged up its bearish bet to 0.29%.
Lower down the market, Dawson Holdings, the magazine and newspaper distribution group, lost a third of its market value after the Guardian revealed it had lost one of its most valuable contracts. Frontline Group, which handles a third of the magazines published in the UK, said it would not renew a contract with Dawson's when it runs out in April 2010. Dawson also said it had lost a second distribution contract, with Seymour, which is part owned by Frontline.
Dawson fell 15p to34.5p . Frontline will use two existing suppliers from next year, Menzies Distribution and Smiths News. Smiths rose by 4.75p to 50.75p, while John Menzies, which owns Menzies Distribution, slipped 4.5p to 50.5p.
Broadcaster UTV Media, which operates the ITV franchise in Northern Ireland, rose 9.25p to 68.5p. The company saw a 6% rise in 2008 revenues, helped by its non-TV business. In a buy note Lorna Tilbian of Numis said:
"UTV produced a highly creditable performance in 2008, in our view, clearly outpacing its peers both operationally and financially. Having raised equity and refinanced last year, the group has solid liquidity and we note that it was the only traditional B2C media group to pay a final dividend this reporting season. While we recognise that the outlook remains difficult, we are encouraged by UTV's continued outperformance, both operationally and financially."
On Aim, Catalytic Solutions, a specialist in emissions control systems and products, added 2.5p to 7.5p after announcing a $9m order from a major oil company. But stem cell business ReNeuron lost 3.625p to 4.375p as it unveiled plans to raise £3m by placing new shares at a heavily discounted 3p each, while anti-counterfeiting company OpSec Security fell 7.75p to 9.75p following a warning of lower earnings and a likely breach of its banking covenants. It is currently in discussions with its lenders.
Finally, web hosting and domain name specialist Group NBT slipped 3.5p to 214.5p despite reporting half year underlying profits up 24% to £3.07m. Analyst Phil Smith at Fairfax issued a buy note on the business with a 300p price target.
