Footsie in positive territory despite heavyweight losses

An unexpected sharp increase in US jobless figures added to cautious trading, which saw the FTSE 100 Index struggle for direction, closing up 7.52 points at 5534.24.

America's Dow Jones Industrial Average was down more than 30 points soon after the unemployment figures, which revealed that employers cut 85,000 jobs last month – far worse than the 8,000 drop analysts expected.

The news cast fresh doubts over the recovery of the world's largest economy and sent the US dollar plunging.

US November payrolls were revised to show the economy actually added 4,000 jobs rather than losing 11,000 as initially reported, breaking a streak of 22 consecutive monthly losses, the Labor Department's report showed.

With revisions to October, however, the economy lost 1,000 more jobs than previously estimated over the October-November period and the stable unemployment rate in December reflected a surprisingly large number of discouraged jobseekers leaving the labour force.

The pound rose 0.4 per cent to 1.60 dollars, while it also gained strength across most of the major currencies.

Among stocks, Royal Dutch Shell was one of the market's biggest fallers, down 20p to 1835p, as the price of a barrel of oil fell back below 83 US dollars.

Other high profile fallers included heavyweight players in the retail sector as fears over 2010 trading prospects showed no sign of easing.

Marks & Spencer continued its poor run by falling 45/8p to 3663/8p, while Next dropped 19p to 2040p and B&Q owner Kingfisher eased 41/4p to 2255/8p.

Vodafone fell for a second successive session after US firm Verizon Wireless played down hopes that the pair's joint venture will pay a dividend later this year. Vodafone shares were down 13/4p to 137p.

Barclays was one of a number of financial stocks making gains, rising 5p to 3201/2p and extending its recent strong run after broker UBS upgraded its rating on the stock from neutral to buy. The latest round of trading updates from consumer-facing firms delivered positive news, with Mitchells & Butlers up 8 per cent in the FTSE 250 Index after revealing like-for-like sales rose by a "strong" 3.4 per cent in the six weeks to January 2.

Shares in the All Bar One operator were 213/8p higher at 2733/4p, while rival JD Wetherspoon added 25p to 466p.

Ted Baker was another firm on the front foot – up 11p to 516p – after it revealed a 19.1 per cent rise in retail sales and said it was performing ahead of hopes in the UK.

Investec Securities upped its profits forecast by 7 per cent following the update.

And Mecca bingo firm Rank advanced 1/2p to stand at 90p after the launch of new-style casinos helped its Grosvenor division report like-for-like revenues growth of 4 per cent in the 12 weeks to December 27.

Aberdeen Asset Management was a heavy faller after it acquired part of Royal Bank of Scotland's asset management business for 84.7m. With Aberdeen issuing new stock in order to finance the deal, shares fell 45/8p to 134p.

The biggest Footsie risers were Eurasian Natural Resources ahead 51p to 1034p, Legal & General lifted 21/2p to 841/4p, Carnival up 56p to 2206p and ICAP rose 113/8p to 4565/8p.

The four biggest Footsie fallers were Man Group down 75/8p to 3193/4p, London Stock Exchange slipped 16p to 7071/2p, Royal Bank of Scotland, and Autonomy Corporation down 32p to 1560p.