Mar. 13--Storm clouds hovered above package tour operator Thomas Cook as the shares nosedived to 197.4p and closed 26 1/4p lower at 203 1/2p. Peter Fankhauser, head of Continental European operations, sparked the hefty sell-off after revealing at the International Tourism Fair in Berlin that the group had experienced a "very bad" January, the mostimportant month for summer holiday reservations. Bookings have recovered in recent weeks but he also warned that next year "will be even more difficult than this year."

Although Fankhauser suggested the group may still meet its sales targets this summer if last-minute bookings come through, the damage to the share price had already been done. Sellers swelled turnover to a well above average 18m shares. In what appeared to be a classic case of the right hand not really knowing what the left hand is doing, an obviously embarrassed Thomas Cook rushed out a reassuring statement ahead of next Thursday's planned trading statement.

It said the board remains confident in achieving its expectations for the year as a whole and believes the group remains well positioned for the future. Summer holiday bookings have recovered and capacity has been reduced by 10pc in Continental Europe.

Rival TUI Travel, formed by the merger of First Choice Holidays and the tourism division of Germany's TUI, was sold in sympathy down to 216 1/2p and closed 14p off at 226 1/4p.

Under the weather and down 77 points before elevenses, the Footsie perked up later when Wall Street replaced a 58 point loss with a 144 point gain. The close in London was 18.25 points higher at 3712.06.

Traders in New York were buoyed by news that US retail sales began the year much stronger than expected and the Dow Jones closed up 239.66 at 7170.06. And although General Electric lost its top level AAA Standard & Poors credit rating -- held since 1956 -- the downgrade was not as bad as feared.

Insurers were a mixed bag. Aviva succumbed to renewed selling after a Citigroup downgrade to sell from hold. The shares collapsed to 179.4p and closed 22 1/2p down at 191p following turnover of 32.7m. The broker warned clients Aviva looks risky. It has high asset leverage, not just to corporate bonds (£30bn) and asset-backed securities (£8bn) but to equities (£11bn), property (£4bn) and loans (£22bn). Its available capital requirement is the lowest in the sector. The reassuringly dull results of Standard Life (up 11 1/2p at 172.8p) helped Friends Provident advance 6.2p to 72.3p and old mutual firm 1.6p to 38.6p.

Institutional demand helped SIG, the former Sheffield Insulation Group, rise 13 3/4p to 112 3/4p.