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Mixed results from US banks Citigroup and Bank of America took the gloss off the markets today as the FTSE 100 struggled to hang on to early gains.
The Footsie broke through 4400 this morning, but lost momentum this afternoon after the troubled banking giants failed to replicate bullish results from Goldman Sachs and JPMorgan this week.
The blue-chip index stood 30.28 points higher at 4392.12 while shares on Wall Street opened lower as investors took stock of the uninspiring earnings and uncertain outlook for the economy.
The Dow Jones Industrial Average was down 23.28 to 8688.54.
Volumes in London were thin and traders joked that there was more interest in the golf and the cricket than the stock market.
However, global equities remained on course for their best week since May amid hopes an economic recovery is just around the corner.
The Footsie has risen 6.2% since starting the week at 4134, its strongest performance since January.
It is still some way off the 4434 mark at which it opened the year.
Nouriel Roubini, the notorious bear who called the meltdown of the past two years and earned the nickname Dr Doom, reckons the worst of the financial crisis is over.
"The freefall of the economy has stopped," the New York professor said. "There is light at the end of the tunnel. And the light at the end of the tunnel for once is not the one of an incoming train."
But he added that the economy is still in bad shape and further stimulus will be needed.
City traders warned that the stock market has risen far enough and a correction is on the way.
There are very real concerns that impressive earnings by the likes of Goldman may be limited to the first and second quarters of the year and more grim news is on the way in the second half. Bad loans are the major worry.
Barclays was up 1.95p to 316.83p, Royal Bank of Scotland gained 0.73p to 38.88p and HSBC was 6.4p higher at 543p. Lloyds Banking Group fell 0.39p to 69.56p.
Xstrata, the world's fourth-largest copper producer, led the miners higher with a gain of 24.1p to 687.6p.
It was followed by Vedanta Resources, India's largest copper producer, up 49p to 1490p, Rio Tinto, 42p higher at 2122.5p, and Eurasian, 39½p to the good at 760p.
BT advanced 2.15p to 108.9p after the UK's largest phone company was upgraded to outperform from market perform at Sanford C Bernstein.
The broker said profit expectations were at "unrealistic lows" and there is now a "plausible long-term investment case" for the company.
Citi raised its price target on Britvic to 360p from 350p following this week's profits upgrade by the firm.
Plenty of sunshine at Wimbledon and the growing popularity of Twenty20 cricket have boosted sales of its drinks, which include Robinsons and Tango.
There is also speculation in the City that Diageo is considering a bid and the shares rose 4½p to 315¾p.
Mothercare was also attracting attention. Altium raised its target to 473p from 402p after the High Street store reported a decent rise in sales despite the recession.
In the UK, same-store sales were ahead 5% this spring while overall sales were up more than 9%. But the shares fell 1½p to 537½p.
Analysts at Bank of America Merrill Lynch welcomed the "vision" chief executive Steve Morgan has for his housebuilder Redrow after two years of misery for the industry.
Taking Redrow back to its roots of three-to five-bedroom family homes won praise from analyst Mark Hake and his colleagues at the US bank, and the City expects the next - and hopefully final - round of land writedowns to be smaller than last year's.
Hake & Co lowered estimates for this year, but are reckoning on a much smaller loss in 2010, and the shares fell 3p to 183¾p.
Barratt Developments was also on the slide, down 1½p to 161¼p, after analysts at Panmure Gordon reiterated their sell recommendation on the stock.
The shares have jumped 9% in little more than a week and Rachel Waring and Mark Hughes at Panmure warned that although business at Barratt was more stable than a few months ago, further writedowns to the value of the land it owns were on the way.
After £770 million of writedowns to date, they predicted a further £20 million this year and £250 million in 2010.
