Grim news from US dominates London trading

The Footsie index of 100 leading stocks is off 73.8 points by lunchtime to stand at 5402.7, having fallen by more than 90 points in the first hour of trading.

Heavy losses in tech and telecoms shares follow the release of the US Federal Reserve's "beige book". It warned that growth in the US was at a near standstill and also highlighted concerns over retail sales, export orders and the spread of the downturn beyond the manufacturing sector.

On the London Stock Exchange, telecoms services group Energis is off 7% or 7¼p at 102p; Colt Telecom has fallen back 13½p to 301½p; telecoms equipment group Spirent has lost 7¼p to 170¾p; Cable & Wireless has dropped 18½p to 331½p; and BT has shed 9¾p to 448¾p.

Vodafone is down 3% or 5p at 137¾p; and Marconi has fallen 3½p to 86½p, a far cry from the 719p price at which it opened the year.

Among the tech fallers, chip designer ARM Holdings has fallen 5% or 14¾p to 280¼p; software group Sage has dropped 14p to 218p; and computer services groups Logica and CMG are down 49p to 659p and 8p to 236p respectively.

Reed International leads the 14 stocks out of the top 100 which are making any progress. Its share price is up 5% or 27½p to 603p after it shrugged off concerns about the advertising market with steady growth in both interim profits and sales at Reed Elsevier.

Shares in slimmed-down engineering group GKN are up 11p to 290p after it reassured investors that US car production was beginning to stabilise. A slump in car production in America led to a 24% fall in first-half profits at the group, which has demerged its industrial services arm into Brambles.

Footsie 250-listed software group Guardian IT has seen its share price fall by 47.5% or 192½p to 212½p, wiping £136 million from its market value, after it warned of tough conditions in the web-hosting market - a downturn that will hit its web infrastructure arm.

Fellow software company Kewill Systems has slumped by 30% or 24p to 56p after it cut 15% of its global workforce to shave costs following a sharp fall in sales.