Investors were already worried about the US debt crisis and a possible Spanish downgrade, but weaker than expected US growth figures have sent markets tumbling even further.
Second quarter GDP figures showed a rise of 1.3% but this was well short of expectations of 1.8% to 2%, casting renewed doubts about the state of the world's biggest economy just when US politicians are struggling to reach agreement on lifting its debt ceiling.
So the FTSE 100, down around 55 points ahead of the release of figures, is now down 89.02 points at 5784.19. The fall would have been worse if not for a near 4% rise in Vodafone, which has added more than 11 points to the index.
The Dow Jones Industrial Average futures, down 57 points initially, are now indicating a 127 point opening decline.
