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UPDATE: FTSE 100 drops, Dow Jones and S&P 500 fall in early trade

Last updated: 14:18 23 Nov 2011 GMT, First published: 15:18 23 Nov 2011 GMT

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The FTSE 100 is poised to extend its losing streak to eight sessions after falling in morning trade as investors continued dumping riskier stocks amid concerns that the European debt crisis is spiralling out of control. 

The UK’s blue chip index stood at 5,173, down 32 points (0.6 percent) from Tuesday’s close.

Yesterday’s downward revision of the US GDP estimate for the third quarter from 2.5 percent to two percent was followed by today’s downbeat Chinese data.

HSBC revealed that its China purchasing managers index (PMI) slumped from 51 in October to 48 this month, the biggest monthly contraction of the manufacturing sector since March 2009.

Minutes from the latest policy meeting of the Bank of England (BoE) added fuel to the fire, saying that the risk posed to the UK economy by the euro zone debt crisis has increased, “exacerbating the already severe strains in bank funding markets and financial markets more generally”.

At the same time, policymakers indicated that no further extensions to BoE's £275 billion quantitative easing programme are planned.

The minutes was released a day after a survey of 68 firms by BoE showed that fear of a major financial crisis has grown to the highest level since 2008.

Financial stocks were in decline as hedge fund manager Man Group (LON:EMG, down 7.1pct at 127.7p) slid to the bottom of the FTSE 100 pile.

Man was followed by asset management firms Ashmore group (LON:ASHM, down 3.4pct at 310p) and Schroders (LON:SDR, down 2.6pct at 1,217p).

Satellite telecommunications firm Inmarsat (LON:ISAT, up 2.8pct at 402p) did better, climbing to the top of the FTSE 100 leaderboard.

The stock was recovering from yesterday’s decline of 12 pence that came amid speculation that it could soon be demoted to the FTSE 250.

US markets

US stocks were off to a negative start today under pressure from concerns over the slowing economic growth in China and today’s US consumer spending data.

The Dow Jones Industrial Average (DJIA) was down 103 points (0.9 percent) at 11,390 in early trade, while the broader S&P 500 index slipped 13 points (1.1 percent) to 1,175.

This morning, the Commerce Department revealed that consumer spending in the US rose just 0.1 percent in October despite a bigger than expected increase of 0.4 percent in incomes, suggesting that consumer confidence remains as a low level.

Today’s macroeconomic calendar also includes the University of Michigan’s consumer confidence index, which will be released later this afternoon.

UK corporate news

Back in the UK, today’s news in the top flight included Weir Group’s (LON:WEIR, down 2.4pct at 1,700p) acquisition of US operating wellhead specialist Seaboard for US$675 million.

Based in Houston, Texas, Seaboard supplies engineered wellhead and pressure control equipment to the oil and natural gas exploration and production industries and provides associated field and support services.

The firm is focused on the North American unconventional oil and gas drilling and production markets.

Other news in the top flight included updates from mining majors Anglo American (LON:AAL, down 1.3pct at 2,203p) and Rio Tinto (LON:RIO, down 1.8pct at 3,001p).

Anglo American announced first copper from the expanded Los Bronces project in Chile.

The Los Bronces mine, at peak production, is expected to be the fifth largest copper mine in the world.

The firm said it was expecting to more than double the mine's existing production of 221,000 tonnes per annum over the next three years.

Rio Tinto reported that it has received Canadian Competition Bureau clearance for its offer for Canadian uranium miner Hathor Exploration for C$4.70 per share.

The latest offer from Rio Tinto, which values Hathor at 654 million, trumped a C$4.50 per share bid from Saskatchewan operating uranium major Cameco.

Fellow FTSE 100 constituent, chemicals and precious metals group Johnson Matthey (LON:JMAT, down 1pct at 1,753p), reported strong interim results and forecast that the second half will be slightly ahead of the first.

Revenue in the six months to September 30 2011 rose to £5.9 billion from £4.56 billion a year earlier, an increase of 29 percent, while underlying pre-tax profit soared 24 percent to £203 million.

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