Headline shares were modestly lower in midday trade, as falling house prices and slowing retail growth added pressure to already fragile investor sentiment, with holiday operator Tui Travel Plc (LON:TT.) tumbling on a profit warning. At high noon, the FTSE100 was down 16.39 points at 5,394.13 with the FTSE250 off 88.4 points at 10,123.8 and the FTSE Smallcaps 7.91 points lower at 2,826.83. US stock futures moved sharply lower ahead of the Fed's announcement on interest rates and monetary policy later in the day. Dow Jones Industrial Average futures lost 68 points at 10,598, S&P500 futures fell 8 points at 1,117 and Nasdaq 100 futures shed 11.5 points at 1,900.2.

LONDON MARKETS

Falling house prices and slowing retail sales in July gave investors in London food for thought this morning, casting more doubts over the UK economic recovery. Top add to the downbeat attitude, US futures dipped, reflecting nervousness ahead of the next pronouncement on US interest rates later today. Losses were restricted by news that the UK Trade Deficit narrowed to £3.3bn in June.

A series of ill-received earnings reports in London also helped dampen spirits, with an announcement by International Power (LON:IPR) that is merging with France's GDF-Suez finding few plaudits. GDF will own 70% of the new company, the deal having been sweetened with a 92p per share special dividend. The group made a profit from operations of £524m in the half-year to end-June, down 5% (down 9% at constant currency). International Power shares slipped 16p at 364p.

The travel and leisure industry suffered as Thomson Holidays operator Tui Travel Plc (LON:TT.) warned that annual results would be at the lower end of forecasts after a falling off in UK bookings, exacerbating the problems encountered with volcanic ash and airspace restrictions. TUI shares tumbled to the foot of the FTSE league table, down 20.5p at 205.1p, while midcap peer Thomas Cook Group Plc (LON:TCG) slumped 10.4p at 188.1p and cruise operator Carnival (LON:CCL) sank 42p at 2,275p on the read across.

Intercontinental Hotels Group (LON:IHG) failed to impress with better-than-forecast half-year operating profits, the shares sliding 50p at 1,074p. Budget hotel rival Whitbread (LON:WTB) lost 13p at 1,458p in sympathy.

Mining shares felt the heat as recovery hopes waned, with Xstrata Plc (LON:XTA)…

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