Thursday lunchtime business bulletin

Jun 12 2008 By Andrew Mernin

Carphone Warehouse and Argos owner Home Retail Group fell heavily today after updates from the pair failed to soothe nerves in the retail sector.

Stronger mining and energy stocks meant the FTSE 100 Index jumped 49.1 points to 5772.4 by mid-morning, but this masked further volatility for housebuilders, retailers and banks, including HBOS and Barratt Developments.

Carphone led the Footsie fallers board, down 9% or 19.75p to 208p, after revealing broadband connections in April were hit by the house market slowdown.

Home Retail Group was also punished for a 12% fall in sales at Homebase, even though trading at Argos was better than expected and the company stuck by profit forecasts. Shares dipped 16p to 207.75p, a fall of 7%.

B&Q owner Kingfisher was impacted by Home Retail’s first quarter update, with shares down 5% or 5.7p at 118.5p. BSkyB was down 8.5p to 503.5p and BT Group dipped 4.25p to 207.75p following Carphone’s broadband update.

The size of deposits being put down by first-time buyers reached a three-and-a-half year high during April as the credit crunch continued to bite, figures showed today.

People taking their first step on to the property ladder put down an average of 13% of the value of their new home during the month, the highest level since November 2004 and up from 11% in March, according to the Council of Mortgage Lenders.

The group said there were clear signs of lenders further tightening their lending criteria in the face of ongoing funding constraints and the housing market downturn.

Retailer Woolworths was fined £350,000 today after the group failed to tell the stock market about a share-price moving change to a major contract.

The fine, which relates to an incident in 2005, is the second biggest of its kind imposed by the Financial Services Authority (FSA) for failure to disclose information to the market in a timely manner.

Woolworths did not reveal immediately in December 2005 that the terms of a Tesco supply contract for its subsidiary Entertainment UK were being changed, hitting its 2006/07 profits by £8 million.

The FSA said the breach of rules was ``unacceptable", although Woolworths was found not to have acted deliberately.

The pound at noon was US$1.9484 compared to US$1.9636 at the previous close while the euro at noon was £0.7916  compared to £0.7922 at the previous close.