Of the 102 FTSE 100 stocks Alliance & Leicester led advancing stocks with a rise of 5.96% followed by gains in Carnival Plc of 4.72%, in Experian Group of 3.84%, in British Airways Plc of 3.63%, and in Anglo American Plc of 3.38%.

Financial stocks gained on reports that the government will protect depositors’ funds in Northern Rock by making a private sell of lender, ending speculation that the government had opted to nationalize it.

British Airways climbed after a report from the statistics office showed that air transport made a significant contribution to service sector output.

Kingfisher Plc led decliners in the FTSE100 stocks with a drop of 5.29% followed by declines in Royal Dutch Shell of 5.29%, in British Energy of 4.94%, and in Sage Group of 4.83%.

Retailers also fell on expectations that the economy is slowing. Wolseley Plc shed 3.63% and Tesco plunged 3.58%.

Tullow Oil reported today in its trading update and operational update published on its web site today that working interest production averaged rose 13% from 2006 to 73,100 barrels per day, adding that gross production from Equatorial Guinea assets exceeded 100,000 barrels per day.

However, work interest production is expected to average between 70,000 to 74,000 barrels per day this year. The stock closed down 1.55%.

In 2007 the company drilled 16 exploration wells and nine of which had hydrocarbon sources and the company has contracted two rigs to drill up to seven wells of which the first exploration has already begun.

[R]11:30AM New York – Investors remain skeptical of the effectiveness of the Fed rate cut.[/R]

U.S. stocks opened lower and fell more after two hours of trading as investors worried that rate cut alone may not save economy from sliding into a recession. European markets fell after a tough talk on inflation from the European Central Bank. However, Asian markets rallied on the U.S. rate cut.

The U.S. economy has been leveraged on easy credit and low interest rates for the last seven years. The speculation in the housing market and rampant increase in construction spending was fueled by cheap credit and lax loan standards. Rate reduction, the blunt instrument, used by the Fed to stimulate economy is not going to help in unwinding the leverage in the economy.

Consumers and banks are leveraged and lower rates are not going to help in reducing this leverage in the financial system.

In fact, there are significant risks that the rate cut may add fuel to rising inflation in energy and food prices. Dollar could also come under pressure if rate fall any more.

Dow Jones Industrial Average fell 92 to 11,879.56, Nasdaq declined 40.89 to 2,251.34, and S&P 500 lost 15 to 1,295.50.

Apple Inc (AAPL: chart) fell 14% or $22.11 to $133.49 after it reported lower than expected earnings forecast for the current quarter and lowered revenue growth to 29% from 35%. Apple reported earnings in the first quarter, which included holiday sales, of $1.58 billion or $1.76 per share compared to $1.0 billion compared to $1.14 per share a year ago. Revenue in the quarter jumped $9.6 billion from $7.1 billion a year ago.

Apple shipped 2.32 million Macintosh computers, representing 44% unit growth and 47% revenue growth over the year-ago quarter. The Company sold 22.12 million iPods during the quarter, representing 5% unit growth and 17% revenue growth over the year-ago quarter. Quarterly iPhone sales were 2.31 million.

“Apple''s revenue grew 35 percent year-over-year to $9.6 billion, an increase of almost $2.5 billion over the previous December quarter''s record-breaking results,” said Peter Oppenheimer, Apple''s CFO.

He added, “Our strong results produced cash flow from operations of over $2.7 billion during the quarter, yielding ending cash balance of over $18.4 billion. Looking ahead to the second quarter of fiscal 2008, we expect revenue of about $6.8 billion and earnings per diluted share of about $.94.”

Motorola (MOT: chart) reported sales of $9.65 billion in the fourth quarter of 2007. Net earnings in the quarter were $0.04 per share, which include $0.05 per share from continuing operations and a net loss of $0.01 per share from discontinued operations. Earnings from continuing operations include net charges of $0.09 per share related to a legal settlement, charges associated with previously announced workforce reductions and a write-down of assets, partially offset by tax benefits.

For the full year 2007, sales were $36.6 billion. The net loss was $0.02 per share, which included a net loss of $0.05 per share from continuing operations and earnings of $0.03 per share from discontinued operations. The net loss from continuing operations included net charges of $0.29 per share.