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Investment analysis

What promised to be a better week after a positive first day of trading

ended disappointingly, with the major global stockmarkets finishing the

first week of the third quarter lower.

Further profit warnings, particularly Marconi&#39s, dampened market sentiment

even further.

In the US, a shorter trading week stated positively with encouraging

economic data from the National Association of Purchasing Managers showing

a rise in manufacturing activity.

However, a spate of negative statements from over 20 US companies later in

the week sparked a broad sell-off on Wall Street as the losses spilled over

to all sectors.

US unemployment rose for the second time in three months, giving more

scope for a further Fed cut. The technology sector lost all and more of the

gains made in the previous week, with the Nasdaq 100 index shedding 8.1 per

cent.

European markets were rocked on Wednesday as Marconi suspended dealing in

its shares ahead of a poor statement. French telecoms company Alcatel and

Ericsson lost 7.5 per cent and 6.6 per cent respectively.

The euro fell to new lows as the eurozone economic sentiment index slipped

further than analysts had expected.

Technology issues suffered in the UK as Marconi ann-ounced that profits

would be half of what had been expected and that 4,000 jobs would be lost.

The company&#39s share price fell by 58.7 per cent over the week as investors

went heavy on John Mayo, ousting him as chief executive designate.

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