Early trading saw the FTSE 100 fall after reaching a 12-month high on Monday.
The FTSE 100 plunged sharply in morning trading, as banks and mining stocks dragged the index down.
Lloyds Banking Group, the part-nationalised banking group, confirmed today that it has gone into talks with the Treasury about changing the terms of its participation in the Government's insurance scheme for toxic assets.
Over the past quarter, we have witnessed the continuation of the corporate bond market rally, with optimism levels seemingly high over future growth.
Positive US job figures failed to spur the Dow Jones in early trading on Wednesday.
Lloyds Banking Group is among the fallers in early trading on Wednesday on rumours it is close to securing a deal that will see some of its bad loans insured under the Government's asset insurance scheme.
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Lloyds Banking Group has dismissed as "rumour" reports it may sell part of its fund management business in a bid to raise cash following its bailout by the UK Government.
Lloyds' decision to sell Insight Investment to the Bank of New York Mellon for £235m and bring the rest of its asset management business under Swip saw its share price fall 0.3% to 90.72p in early trading today.
The Dow Jones has tumbled in early trading, down 0.65% on the back of data showing US companies cut more jobs last month than economists estimated.