LONDON (AFP) - British blue chip shares recorded modest gains, after earlier falling back in response to a weak performance by Wall Street.

At the close of trade on Wednesday, the FTSE 100 index rose by 2.8 points to 4,548.4, well below a peak of 4,575.2 but above an opening low of 4,541.9.

Volume was solid with 3.0 billion shares changing hands in 219,451 deals.

On Wall Street, the Dow Jones Industrial Average was down 65.90 points to 10,252.30, while the Nasdaq composite index lost 18.30 points to 1,897.10.

A second half profit warning from soft drinks giant Coca-Cola raised concerns about the outlook for US corporate earnings, while the latest data offered mixed signals on the overall state of the world's biggest economy.

US industrial output was below forecast in August, rising by just 0.1 percent. This disappointed economists who had been expecting an increase of 0.4 percent.

Crude oil futures topped 45 dollars a barrel in New York, after the Energy Department revealed that crude supplies were down 7.1 million barrels to 278.6 million in the week ending September 10.

The impact Hurricane Ivan might have on oil supplies in the Gulf of Mexico also remained a factor for traders, who offset news that the OPEC oil cartel will raise its official production quota by 1 million barrels a day from November 1.

Strength in oil issues was a crucial factor in boosting the FTSE -- with Shell up 4-1/2 pence at 417, and BP ahead 4-1/2 pence at 511-1/2.

However, the main focus in London was the Abbey National bid situation after HBOS said it would not proceed with an offer for its smaller rival.

Analysts were not surprised by the decision noting that the regulatory risk and the problems of integration and execution were probably the main hurdles.

The news leaves the way clear for SCH's agreed takeover bid for Abbey to proceed.

In reaction to the news from HBOS, Abbey National shares topped the FTSE 100 losers board, down 37-1/2 pence to 572-1/2, while HBOS shares topped the risers board, up 23-1/2 pence gain to 738.

Among other blue chip gainers, ITV shares added 1-1/2 pence to 109-1/2 after the broadcaster's management gave a positive presentation to the HSBC media conference on Tuesday -- specifically guiding analysts to expect positive advertising revenue growth in October.

Elsewhere, shares in InterContinental Hotels gained 14-1/2 pence to 636 after its chief executive, Richard North, announced he will be stepping down at the end of September.

Shares in Amvescap added 8-1/2 pence at 308-1/2 -- making it the second best performing stock on the FTSE 100 -- as dealers noted that a cut in its interim dividend lifted the uncertainty which has surrounded the group.

Amvescap, which announced on July 29 that it was deferring payment of its interim dividend, declared the payout of 2.5 pence, down from five pence in 2003.

The dividend reduction came in the wake of the firm's monetary settlement following the investigation by the US SEC into market timing.

In response to the news, Cazenove downgraded its recommendation on Amvescap to 'underperform' from 'in-line'.

But an upgrade by the blue-blooded broker was a spur to gains in the Rio Tinto mining group, up 16 pence at 1,398.

Among Wednesday's other blue chip fallers, Cadbury Schweppes shares were affected by a profit warning from US drinks giant Coca Cola.

The US firm affirmed its downbeat July view that second half 2004 earnings per share "will be negatively impacted by challenging operating conditions in key markets."

In reaction, Cadbury Schweppes shares shed 9 pence at 441.

Scottish and Newcastle ended the day as the second worst performing issue on the FTSE 100, with its shares losing 3.58 percent of their value to close at 384 pence.

Telecom giant Vodafone was once again the most popular stock, with 291 million shares changing hands.

Traders also scrambled to exchange shares in the Abbey, with 105 million transactions taking place.