Downbeat US data drags London market into red

But progress on the wider FTSE 100 Index was held back after news of a meagre 2 per cent rise in US gross domestic product in the third quarter.

The Footsie closed 2.73 points lower at 5675.16, while the Dow Jones Industrial Average on Wall Street also struggled to make headway after the growth figures, which were largely in line with expectations but showed little progress on the 1.7 per cent rise seen in the second quarter.

The result is also under scrutiny for confirmation of the Federal Reserve's plans for further monetary stimulus, with hopes it will announce new moves at its monthly decision next week.

The dollar remained weak against the pound and euro as expectations mount that the Fed will act, with sterling at 1.60 dollars.

Among stocks, the focus was on utility firms after SSE's announcement.

Its shares lifted 3 per cent, or 38p to 1153p, while Centrica also benefited with a 103/8p gain to 3321/4p.

Insurers joined them on the risers' board as the sector moved towards its quarterly results season on an upbeat note.

Aviva led the charge after broker Panmure Gordon said on Thursday third quarter figures from insurers should reinforce the recent recovery of the sector, while sentiment has been further lifted by increased hopes that the UK will avoid a double-dip recession.

Aviva, which will post third quarter figures on Tuesday, rose 53/8p to 3981/8p, while Legal & General added 1/8p to 1003/8p. Elsewhere in the financial sector, part-nationalised Lloyds Banking Group rose 1p to

69p.

British Airways was the leading faller despite posting interim profits ahead of market expectations at 158m, which also marked its first half-year profit for two years.

The airline said it had taken a further step in its recovery, but shares retreated 10p to 2703/4p as investors took profits after a decent run for the stock in recent days.

Outside the top flight, Premier Foods fell another 2 per cent – down 3/8p to 175/8p – after dropping 4 per cent on Thursday in the wake of a disappointing trading update.

Housebuilders were also under pressure in the second tier after Bank of England figures showed September mortgage lending slumping to less than a tenth of the level seen in August, at 112m.

A research note cautioning there is unlikely to be any pick up in the property market until next spring also hit sentiment on the sector.

Bellway fell 16p to 534p and Redrow was 33/4p cheaper at 1101/2p.

The world's largest advertising and media group WPP rose after reporting rocketing third quarter sales in the UK.

Total year-on-year sales from the UK were up 7.4 per cent to 262.3m in the three months ending September 30, compared with 0.2 per cent growth in the first quarter and a rise of 5.1 per cent in the second quarter.

WPP's figures are viewed as an important bellwether of the economy because companies' spending on advertising and marketing can reflect their confidence and strength.

Shares advanced 71/2p to 726p.

The biggest Footsie risers were Scottish & Southern Energy, Centrica, BG Group up 25p to 12151/2p and Severn Trent up 27p to 1395p.

The biggest Footsie fallers were British Airways and Xstrata off 401/2p to close at 12091/2p.