JSP Jessops

By Sarah Turner

London's top share index weakened on Friday, as a combination of jitters ahead of some key U.S. jobs data and broker downgrades worked to keep stocks under pressure.

The U.K. FTSE 100 index declined 0.3%, or 11.66 points, to 4,493.71. Other European shares were also in a tight range ahead of the U.S. data.

Businesses cut jobs in the U.S. at a rapid pace again in December, analysts said, worsening a trend that could produce the largest quarterly job loss since America demobilized its war economy after beating Hitler.

The Labor Department will report on December's nonfarm payroll report on Friday at 8:30 a.m. Eastern, with economists surveyed by MarketWatch expecting payrolls to fall 500,000 after the 533,000 loss in November.

"Recent anecdotal data have jacked up the usual nervousness around the monthly U.S. labor market report a further notch, as speculation of a multi-decade drop in nonfarm payrolls has intensified," noted Kenneth Broux, economist at Lloyds TSB Corporate Markets.

Brokers weigh in

Shares in satellite broadcaster BSkyB fell 5.1%, making the firm one of the worst performers in the top London index, after it was downgraded to conviction sell from neutral by Goldman Sachs.

"The stock is at close to a four-year high P/E premium to the sector and market, despite heading into a trading period where its perceived attributes of defensiveness and growth appear most at risk," the broker said, adding that the company is priced for perfection.

BSkyB is 39% held by News Corp. (NWS), which also owns MarketWatch, the publisher of this report.

Pearson (PSO) shares fell 1.6% after Goldman Sachs also downgraded its stance on the publisher of the Financial Times. It moved to sell from neutral on the stock, saying that it's now one of the most expensive media firms it covers, with a 30% premium to the sector and to other professional publishing stocks.

The broker didn't stop there. Shares in commercial television broadcaster ITV fell 3.1% after Goldman Sachs cut the firm to conviction sell from neutral, citing a weak audience share performance and a worsening outlook for its content division.

But Aegis shares climbed 4.8% after it was upped to buy from neutral by the broker which said the company deserves a premium to other ad agencies given its business mix, new business performance and management change.

Provident Financial, BBA

Elsewhere, Provident Financial shares fell 2.5% after Credit Suisse downgraded the finance firm to underperform from neutral. It said the current economic slowdown will exert upwards pressure on impairment charges.

Away from broker changes, and BBA Aviation shares climbed 9.5%.

The aviation services and system support group said underlying net debt at the end of 2008 is likely to be lower than expected thanks to a continued focus on cash generation and that trading for the year as a whole will be in line with market expectations.

Shares in Uniq soared 46.2%.

The food group said that it has replaced its existing credit facility with a new 60 million pound ($91 million) facility that will mature at the end of 2010. Fourth-quarter sales fell 3.8%, it added.

Jessops shares were almost as strong, up 34.6%. The company, which sells photography equipment, said that 5-week comparable sales jumped 3.1% to Jan. 5.

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