Market Report: Sage slides after downbeat news from US rival

Shares in Sage, the UK's biggest software company, fell sharply yesterday after its US rival, Intuit, warned that it was now expecting much weaker sales next year.

Shares in Sage, the UK's biggest software company, fell sharply yesterday after its US rival, Intuit, warned that it was now expecting much weaker sales next year.

Intuit, whose QuickBooks accounting software competes with Sage's Peachtree package, saw its shares tumble and Sage followed them lower, down 3.75p to 169.5p. Optimists tried to argue that Intuit's loss might be Sage's gain, and its products for small and medium-sized businesses might be gaining market share, but this was not the view that prevailed.

The US market has proved a weak spot for Sage over the past year, and sales in the country disappointed investors when the company posted interim figures last week. The company, though, says the core products are selling well and that any difficulties are only in product ranges that it owns because of acquisitions and which it does not heavily market.

Sage was not alone among technology, media and telecoms stocks in being sold off, as the stock market headed back into the red. After Wednesday's ebullient performance, dealers returned to find that Wall Street had tanked overnight and everyone was fretting about the economic cost of rising interest rates and oil prices once again.

The FTSE 100 closed down 43.1 points at 4,428.7. The FTSE techMARK 100, which measures what used to be called the New Economy stocks, fell most sharply, by 23.11 to 1,110.1. The worst performing blue chip was Reuters, the financial information group, down 17p to 343.5p.

The power of Reuters' big rival, Bloomberg, to move share prices was shown by the shenanigans in the William Morrisons Supermarkets share price shortly before lunch. Bloomberg was putting out headlines from the trading statement as it was read out at the company's AGM, before the statement was released to the stock market. The first headlines ("15-week same-store sales up 8.9 per cent") sent the shares up 1p; the second headlines ("Safeway sales volumes not sufficient to compensate for prices") sent the shares plunging by 10p; and it wasn't until the release of the full statement (headlined "Safeway sales growing in coming months") that everybody had a clear picture and started to calm down. The stock closed 2.75p lower at 232.25p.

Mining stocks that had been strong on Wednesday fell back, with Rio Tinto coming off worst. It was down 32p to 1,250p. Antofagasta, the Chilean copper miner, dipped 12p to 886p after the broker Dresdner Kleinwort Wasserstein turned bearish on the stock. It warned that the copper price had been artificially inflated by hedge fund speculators who were on the verge of closing their positions.

Rentokil Initial slid a further 1.5p to 150p on confusion over strategy following the exit of Sir Clive Thompson as chairman. Several brokers warned that this week's news of tough trading and disappointing margins is unlikely to be the last. PHS Group, Rentokil's smaller rival, was off 1.5p at 79p on fears it is suffering, too.

It is not until next Tuesday that Countrywide Assured does the splits, but shares in the two halves of the business were already trading on the stock market yesterday on a "when issued" basis. Chesnara, which is the closed life insurance business, opened at 113p and ended the day at 111.75p. Countrywide, the estate agency half, opened at 268p and jumped to 282.5p. Countrywide Assured shareholders get half a Countrywide share, a quarter of a Chesnara share, a 4.75p final dividend and a 25.8p return of capital for every share. This added up to 199.7p last night, while Countrywide Assured shares closed up 3.5p at 198p. Observers wondered if that was close enough to prove the stock market is efficient.

Eidos, the computer games developer, disappointed again, blaming "recent and unexpected softness" of the games market. Its shares fell 56.5p to 120.5p and there was fallout across the sector. SCI Entertainment fell 5p to 119p and Warthog was off 0.02p at 2.4p. Some traders were even moved to worry that slower games sales might affect HMV, the mighty retailer, whose shares were off 3.75p at 232.75p.

The Eidos news eclipsed an earlier profits warning from Montpellier, an AIM-listed construction group, whose shares collapsed 10p to 23.5p. There have been a string of boardroom resignations in recent months, including the deputy chairman, Peter Gyllenhammar, who attracted the ire of some shareholders by buying some of the company's assets for his own private investment vehicle. The new team has found "material problems" with several construction work contracts.

Patsystems was down 0.25p at 19.25p in the absence of news on testing of its latest software product. But director sharebuying boosted two other tiddlers, the software services group Tikit, up a penny at 123p, and the sports management group CSS Stellar, also up a penny to 54.5p.

MARKET MOVERS

OverNet Data 96p (up 45.5p, 90.1 per cent). Shares return from suspension as company unveils acquisition of FutureGene and new strategy developing genetically-modified crops.

Sanctuary 48.75p (up 0.5p, 1.0 per cent). Stock overhang cleared.

Maelor 21.5p (up 1p, 4.9 per cent). Urethral catheter cleaning kit gets its first non-European approval in Canada.

Reckitt Benckiser 1,454p (up 29p, 2.0 per cent). Share buy-backs continue as nervous investors seek safety of defensive stocks.

Yule Catto 227.75p (up 8.75p, 4.0 per cent). Trading in line with expectations.

T&F Informa 364.75p (up 10.75p, 3.0 per cent). Investors cast a new eye over the recently merged scientific publisher.

Carphone Warehouse 137.5p (up 1.5p, 1.1 per cent). Strong trading driven by new handsets, gossips hear.

SABMiller 660.5p (up 39.5p, 6.4 per cent). Investors hail turnaround at its Miller business in the US.

ReGen Therapeutics 2.5p (up 0.38p, 17.9 per cent). Positive laboratory tests of its new Alzheimer's treatment.

Alfred McAlpine 298.25p (up 3.25, 1.1 per cent). On course to meet double-digit growth target.

Collins Stewart Tullett 445p (up 6p, 1.4 per cent). Interest rate derivatives likely to have been traded in high volumes recently.

RingProp 285p (up 35p, 14.0 per cent). Interims give its new brokers a positive story to sell.

Royal & SunAlliance 77p (down 2.75p, 3.5 per cent). Citigroup argues that RSA's financial weakness puts it most at risk as insurance premiums start to weaken. "Sell", it says.

Knowledge Technology Systems 8p (down 0.37p, 4.4 per cent). In the final stages of a £2m placing.

QuikTrak Networks 6.75p (down 2.25p, 25.0 per cent). Suspends operations while it seeks a new investor.

National Grid Transco 424p (down 9.5p, 2.2 per cent). Lacklustre results.

easyJet 208p (down 8.75p, 4.0 per cent). Strengthening oil prices set to jack up fuel costs.

Carpetright 975p (down 35p, 3.5 per cent). MFI Furniture profits warning raises fears for consumer spending.