Barclays fell back under 600p yesterday amid heavy volumes of trading as a rumour spread that it was about to use the Bank of England’s overnight emergency facility once again.

Barclays declined to comment. The last time that it used the facility, at the end of last month, when it borrowed £1.6 billion at the punitive rate, it blamed a technical glitch in the market settlement system.

Its shares, down 18p to 598p, have also been battered by a report in The Times on Monday that Barclays has cut credit limits for half a million Barclaycard customers and by talk that it is looking to sell part of the Barclaycard unit – its FirstPlus loan business – for less than its £4.5 billion book value. However, the head of the FirstPlus division told staff yesterday that the head office had committed to developing the unit. Bear Stearns has cut its earnings forecast for Barclays by 7 per cent for this year and by 13 per cent for next year, blaming a worsening performace at Barclays Capital.

The FTSE 100 closed down 69 points at 6,396.9, encumbered by falling mining and banking stocks as fears revived over the effect of the credit squeeze on the economy in the United States. Vedanta Resources was the worst performer among the blue chips, falling 145p to £20.90. Antofagasta was close behind, closing down 53½p at 789½p.

Taylor Wimpey, the housebuilder, dropped 15½p to 255½p after figures indicated that sales of existing houses in America had dropped sharply last month.

Northern Rock fell another 9p to its 163p after reports that it had bowed to pressure from the Financial Services Authority not to pay its promised dividend. Later it confirmed that it was cancelling the dividend.

Home Retail Group, the owner of Argos and Homebase, which is considered to be vulnerable to a housing slowdown, fell 16½p to 351p.

BP slipped 17p to 574½p after Tony Hayward, the chief executive, gave warning in an internal meeting that quarterly results would be “dreadful”.

Of the risers, Wolseley climbed 8½p to 816p after Credit Suisse, which correctly called grim results last week with an 850p price target, said that the shares had fallen far enough. It said that it could downgrade again, however, if the American construction market began to deteriorate.

National Grid was the top riser, up 19p to 780p, after it appointed Robert Catell, the chief executive of KeySpan, its recently acquired business in the US, as executive director and deputy chairman. The utility is regarded as a safe haven during a credit crunch.

Wellstream Holdings, the maker of flexible pipelines for oil and gas rigs, was the leading mid-cap performer, up 75p to 770p, after saying that profits would exceed expectations. Abbot Group, another oilfield service company, was up 6½p at 281½p, and Wood Group added 8p to 426½p. Both have been the subject of bid rumours, with Amec, down 3p to 723p, seen as a potential predator. Britvic, also seen as a possible bid target, gained 3¾p to 315¾p.

New York: Stocks ended mixed as investors wrestled with concerns about consumer spending in some parts of the economy while technology stocks showed broad gains. The Dow Jones industrial average closed up 19.50 points at 13,778.60.

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