Mar. 12--THOMAS COOK APPLIES THE LOTION: A big drop in Thomas Cook's share price this afternoon forced the holidays giant to reassure the City and deny claims business in the package tours industry had dropped off a cliff.

It rushed out a statement insisting it is trading well despite impromptu remarks by an executive. Peter Fankhauser, head of the German business, told reporters at the International Tourism Fair in Berlin that Thomas Cook would meet its summer sales targets only if last-minute bookings came in.

The group said its overall performance remains in line with previous guidance after the shares slumped below 200p following a frantic sell-off. It insisted the package tours market remained challenging, but the board was confident in achieving its expectations for the year as a whole.

It also said the group remained well-positioned for the future. A further trading update will be issued next week. The shares eventually pared back the damage, but were still left nursing a deficit of 26 1/4p at 203 1/2p. Rival TUI, down 8p at 232 1/4p, fell in sympathy.

Shares generally were a touch softer for choice as London took its lead from Tokyo, where share prices were in retreat. The FTSE 100 index fell 15.69 to 3678.12. US retail sales showed a dip of just 0.1 percent last month, which was better than most forecasts. But Wall Street ran into profit-taking this afternoon following two consecutive days of gains. The Dow fell 17.45 points to 6912.95.

Lloyds Banking Group briefly touched a record low of 39.6p before reducing the deficit to 2p at 42.5p. The shares were hit by whispers that a leading US broker has cut its net asset value for the bank, which includes mortgage lender HBOS, to just 9p. The broker also told clients to switch out of Lloyds and into Royal Bank of Scotland, off 1p at 20.2p. Lloyds last weekend concluded terms to join the Government's asset-backed protection scheme for £15 billion. The move could see the Government's controlling stake in the lender eventually grow to 77 percent.

Land Securities lost an early lead, dropping 5p to 341 1/4p, after briefly touching 362 1/2p, while the nil-paid slid 7.5p to 54.5p. Deutsche Bank has been catching up with events, and has slashed its target from 970p to 360p while repeating its hold rating. It says the extra £756 million of cash the property developer recently raised has brought little comfort to the shares.

Petrofac celebrated its promotion to the Footsie 100 with a rise of 20 3/4p to 515p. That coincided with UBS raising its rating from neutral to buy following recent contract wins.