Leading shares are heading sharply lower after worse than expected US jobless claims last week.
The figures come a day before the key US non-farm payroll figures, where analysts had been hoping for a rise in January. But initial claims for unemployment benefits rose 8,000 to 480,000 last week, when analysts had been expecting a fall. Traders said this showed the US jobs market was still stressed despite signs of economic recovery, and could foreshadow poor numbers tomorrow. News that factory orders rose by more than expected in December has done little to halt the slide.
So Wall Street has fallen nearly 200 points, with the FTSE 100 now down 110.05 points at 5143.10. Fears about sovereign debt in Europe - Greece and Spain in particular - added to the grim mood.
