2:00PM New York, 7:00PM London- Marks & Spencer plunge of 24% drags FTSE stocks. Taylor Wimpey fails to attract new capital.

London stock indexes fell led by retailers after Marks & Spencer comparable sales dropped in the quarter ending June. Commodity stocks also fell as investors ahead of US crude oil inventory report.

Market sentiment

In London trading FTSE 100 fell 0.98% or 53.6 at 5,426.30.

Of the 102 FTSE 100 stocks 24 rose, 75 declined, and 3 were unchanged. AstraZeneca led advancers in the index shares with a rise of 4.9% after a U.S. court upheld a patent on its second-best selling product, the Seroquel antipsychotic drug.

Marks & Spencer Sales Fall 5.3%

Marks & Spencer in an interim management statement said that U.K comparable same stores sales dropped 5.3% in first quarter ending June, while like-for-like sales for food declined 4.5%. General merchandise declined 6.2%.

The retailer has also decided to oust food director Steve Esom, who joined the company in April last year from Waitrose and was tipped to replace Sir Stuart Rose-the executive chairman. Esom will be replaced by John Dixon, currently director of home and M&S Direct, the group’s online division.

On the overall, group sales climbed 1.3% driven by a 24.5% increase in international sales and new store openings. Market watchers believe full-year profits are likely to drop 20% to £700 million and £750 million on plummeting sales.

Investors Say No to Taylor Wimpey

The UK based home builder failed to attract investors to replenish its capital despite meeting a large number of institutional investors. The current housing market difficulties are only making it harder for the home builders to sustain sales and remain profitable.

In addition the company said in a statement published on its Website that that the company’s major markets are experiencing “a significant downturn” that is characterized by lower weekly sales and lower average selling prices than in recent years. The company added that it forecasts that the U.K housing market will remain depressed through 2008.

The home builder kept its target of annual savings run rate of £70 million by the end of 2008 and £100million in aggregate by the end of 2009. The company will close 13 of the 39 regional offices and 900 jobs will be cut in a development that is projected to reduce overhead costs by £45 million.

In the U.K. housing net advance reservations were 45% lower in the 26 weeks to June of this year than in the same period last year and the average cancellation rate in the review period was 29%. Total housing completions in the first half of 2008 were one third lower than the same period a year ago.

Taylor Wimpey will announce its interim results on the 27 August.

Gainers & Losers

AstraZeneca led advancers in the FTSE 100 index shares with a rise of 4.8% followed by increases in GlaxoSmithKline of 3.90%, in Vodafone Group of 3.53%, in Old Mutual of 2.60%, and BT Group of 2.48%.

AstraZeneca rose after a U.S. court upheld a patent on its second-best selling product, the Seroquel antipsychotic drug.

BT Group gained after Morgan Stanley upgraded stocks from “in-line” to “attractive”.

Marks & Spencer led decliners in the FTSE 100 index shares with a fall of 24.5% followed by losses in Eurasian Natural of 9.36%, in Wolseley of 8.95%, in Antofagasta of 7.94%, in Next Plc of 7.92%.