The FTSE is in negative territory in early morning trading, despite US markets' overnight retreat.

With little fresh direction for dealers to work from, the FTSE is drifting and although the losses may appear to be modest in comparison to yesterday's sell-off, the temptation to continue unwinding positions in light of the worsening economic outlook could well resurface. Rising commodities prices have led to positive reports from BHP Billiton and Tullow Oil, although the latter is currently propping up the rest of the FTSE with a -4.86% drop in its share price, after news that the oil company's Ugandan partnership faced major delays due to an unresolved tax dispute. BHP expressed caution on the short-term prospects of global recovery, posting only a modest gain of +0.72% this morning.
 Solid earnings news from insurance group Admiral pushed the insurer to the top of the blue-chip leaderboard, gaining almost 5%.

As the day progresses, US data will once again be in focus as concerns over the threat of a double-dip recession mount. Existing home sales disappointed badly yesterday so the equivalent reading for new build properties will be under scrutiny, as will the durable goods orders which are tipped to rise back into positive territory. That big 10,000 level for the Dow will also be closely watched as a sustained break lower here could prove damaging psychologically, with traders on both sides of the Atlantic using it as another excuse to resume selling. As always at some point the bargain hunters will start moving back in but economic uncertainty and yet more support for gilts suggests that this
 might not be happening in the shorter term.