A five-day winning streak on the London markets ended yesterday as upbeat news on the US economy failed to impress investors.

The FTSE 100 Index closed down 7.2 at 4558.4, despite positive remarks from US Federal Reserve chairman Alan Greenspan,

Mr Greenspan told lawmakers on Capitol Hill that US economic growth was picking up and oil prices were not pushing inflation higher.

The Dow Jones Industrial Average initially responded positively to the news, with traders welcoming the prospect of a steady approach to rate rises.

But the optimism had subsided by the time London had closed for business, leaving the Dow 14 points adrift.

Paul Webb, a trader at City broker deal4free.com, said: "Many traders took this as a signal to do nothing and simply to hold existing positions."

In London, British Airways was at the top of the Footsie fallers board after announcing plans to sell its 18.25 per cent shareholding in the Australian flag carrier Qantas.

BA closed down 7p at 228p.

In contrast, electrical retailer Dixons was in the black, up 1p at 161p, after saying that continued strong performances by its Currys and PC World chains left it well placed for a year of progress.

The news sent B&Q owner Kingfisher up 4p to 289p.

Telecoms groups were doing well, with mmO2 shrugging off weekend press reports about alleged problems with its billing systems to stand 1p ahead at 94p. Vodafone was up 1p at 130p.

Among other blue-chips updating the market, cigarettes group Gallaher fell 4p to 645p as a toughening European market offset the encouragement seen from a four per cent rise in half-year profits.

Outside the top flight, Woolworths was up nearly three per cent, or 1p, to 44p, after narrowing pre-tax losses by 5.5 per cent to £34.4m and offering an upbeat assessment of its critical Christmas trading period.

Woolies was followed higher by supermarket chain Somerfield, which overcame a wet July and August to continue its recent sales revival. Shares rose nearly three per cent, or 3p, to 139p.

Building group Carillion was another company to advance, climbing 3p to 200p, after announcing it had won a £180m schools deal as it posted an 89 per cent rise in pre-tax profits to £19.9m.

Sportswear manufacturer Umbro rose 1p to 104p as the group boosted half-year profits 51 per cent following strong kit sales in the lead up to the Euro 2004 football tournament.

Among other companies reporting, miner UK Coal recovered from a sluggish start as the City warmed to its forecast of a stronger second-half to lift shares 3p to 162p