UK markets finished a subdued session, but a volatile month, back in the red again, hurt by renewed war fears and a nasty shock from across the pond.
The FTSE 100 finished the day 11.3 down at 3,567.4, while the techMARK closed 7.4 off at 612.5. The Footsie has now lost a massive 9.5% in January.
London had looked set to drag itself back into positive territory, following news that US consumer spending jumped 0.9% in December, the biggest rise in five months, and personal incomes showed their strongest gains since June. The Chicago Purchasing Managers' Index meanwhile showed business activity grew for the third month in a row.
However, a severe sales warning and a $100 million (£60 million) charge to cover job cuts at from Applied Materials, the leading manufacturer of semiconductor-making equipment, helped keep the Footsie in the red.
Also weighing on the minds of UK investors was prime minister Tony Blair's meeting with US president George Bush to discuss the Iraq crisis. Yesterday's news of slowing US growth in the final quarter of 2002 and reduced forecasts for UK growth from the National Institute for Economic and Social Research did little to help.
In the UK, ICI (ICI) dipped 5.5p to 197.5p in the light of US rival Dow Chemical's poor results and job cuts. Yule Catto fell 7p to 249.5p.
Telecoms and techs suffered in the light of the Nasdaq's falls last night. Sage (SGE) fell 8p to 117.75p, with talk of an acquisition this year. Vodafone lost 0.75p at 109.25p and Misys slipped 7p to 176p.
Housebuilders lost ground after broker Schroder Salomon Smith Barney downgraded the sector. Wilson Bowden slipped 27.5p to 671p, Westbury lost 8.5p at 246p and Persimmon dropped 11.25p to 249.5p.
Worries about the UK economy unsettled Dixons, 4.25p off at 103.25p; GKN, 6p lower at 185.5p; and Lloyds TSB, 8p poorer at 377p.
Morrison (MRW), bidding for Safeway, slipped 9.5p to 160p as it posted its offer document to shareholders.
Mining giant Anglo American (AAL) fell 30p to 830.5p after JP Morgan cut its recommendation. BHP Billiton lost 6p at 283p in sympathy.
However, battered leisure stocks attracted some attention on talk they are undervalued relative to future earnings prospects. Hilton Group climbed 5.5p to 155p and Six Continents 22p to 516p.
Industrial gases group BOC (BOC) rose 9.5p at 775.5p ahead of first quarter results next Tuesday.
Defensive stalwarts BAT rose 8.5p to 573.5p, while Gallaher added 8p at 557p.
The FTSE 250 finished the day 5.2 down at 4,016.4 and the All Share finished 5.11 off at 1,722.28.