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Another commodity was also causing problems for the retailers. As the price of cotton broke through $2 per pound, investors worried about squeezed margins. Mid-cap Supergroup fell 58p to £16.60 and blue-chip, Next, dropped 30p to £19.67.
3.15pm: Wall Street falls on unemployment benefits rise
Wall Street edged into negative territory in afternoon trading following a bigger-than-expected jump in first-time applications for unemployment benefits last week. The Dow Jones Industrial Average fell 15 points to 12273.
London's large-caps were in indecisive mood, with the FTSE 100 edging down 9 points to 6075. The FTSE 250 put on 12 points to 11819.
Housebuilders were experiencing mixed fortunes after Redrow swung back into the black at its half-year results.
Analysts at Matrix Partners kept their "add" rating, saying:
"While there is still much to be achieved, the group under the new management team is moving more rapidly into a position of robust health than we would have thought possible in this tough housing market. The rate of recovery seems to be gathering some momentum, but the aspect that needs careful consideration, we believe, is the durability of the new strategy if consumer confidence and mortgage availability declines further."
Despite its return to profit, Redrow fell 2.8 to 130.2p, but the chairman's comments about the strength of the housing market boosted other housebuilders.
Steve Morgan told journalists: "I'm a lot more confident than I've been at any time since I've been back in the business about the spring selling season."
"We're definitely, definitely seeing a big, big uptake," he said, adding that consumers are "fed up of the doom and gloom".
That helped Taylor Wimpey rise 1.39 to 38.42 and Barratt Developments put on 2.55 to 100.9p.
11.50am: Ladbrokes investors unimpressed by full-year results
Ladbrokes disappointed the market with a fall in full-year profits as revenues from high rollers slumped 95pc to £3.5m. Britain's biggest bookmaker was also silent on takeover talks with 888. Ladbrokes fell 3.9 to 138.1p while Sportingbet dropped 1.51 to 46.99p.
Analysts at Matrix Partners kept their "add" recommendation on Ladbrokes, but said:
"We would expect that sentiment will be on the slightly negative side in terms of the short-term outlook for the numbers. After the very surprising bounces in both Ladbrokes and William Hill share prices following the ‘broadly as expected’ Levy announcement, we would expect both stocks to give up some of those gains today."
William Hill edged up 0.5 to 192.8p.
The wider market was marking time, with the FTSE 100 virtually flat - it nudged up 1 point to 6086.28 while the FTSE 250 put on 20.4 points to 11827.48.
Sean Power, equity analyst at City Index , said:
"The first hour of trading had a very subdued feel to it, which was evident with the ease and speed at which the 6100 mark was reached and then retreated from. In quiet sessions volumes are thin and markets can make ‘false’ moves, which can be quickly reversed. With no real negative news at present the markets could continue to drift slowly upward. Unless there is any market moving news released during the remainder of this morning’s session, one should be wary of any excessive ‘false’ lurch in either direction by the market. Until the US trading session begins investors should trade cautiously given the quiet nature of today’s market."
9.15am: BAE Systems takes tumble as FTSE 100 marks time
The FTSE 100 was trading up just 1.7 points at 6086.92 at 9am, after briefly rising to its highest level since May 2008.
Part-privatised lenders, Royal Bank of Scotland and Lloyds Banking Group, both rose over 1.7pc, buoyed by strong results from Barclays and French bank Societe Generale this week - the two report results next week.
Britain's biggest defence and security company, BAE Systems, posted healthy profits but disappointed on outlook. Shares in the company fell 3.5pc after it said it expected sales to fall in 2011, citing cuts in defence budgets in Britain and the US.
Investec Securities placing its "buy" rating for the stock under review, saying: "It feels like profits can be sustained (on lower revs) in 2011, meaning our forecasts would be largely unchanged. However, risk is firmly on the downside and the shares are likely to reflect this."
Talk of a gradual recovery this year by publisher Reed Elsevier after it reported a 2pc rise in underlying sales in 2010 that was broadly in line with forecasts, put off investors. The shares fell 2.2pc.
Among the second liners, Sports Direct, Britain's biggest sporting goods retailer, said it would meet its target for year profit, with trading still strong after a robust third quarter. The bullish update lifted the stock 4.4pc to 175p, with Seymour Pierce raising its price target to 190p from 165p.
06:00 Asia lacklustre
Asian markets were mixed Thursday, with some boosted from strong US corporate earnings while China sagged after Beijing slapped new restrictions on property purchases to cool the overheating sector.
The Nikkei 225 stock average rose 0.26pc, to 10,837 as the country's auto sector rose. Honda gained 2pc and Nissan 1.4 pc.
Meanwhile, mainland property shares in Hong Kong were pummeled a day after Beijing's city government announced measures to ease its housing squeeze, including restrictions on purchases by nonresidents and limits on the number of homes that residents can buy.
Hong Kong's Hang Seng index was flat at 23,158 and the Shanghai Composite index dropped 0.4pc to 2,910.
In New York overnight, the Dow Jones industrial average gained 0.5pc, to close at 12,288, its highest since June 13, 2008.
The tech-heavy Nasdaq composite index rose 21.21, or 0.8pc, to 2,825.56 on Wednesday.
Thursday's Market Report:
Banks bounce back as blue-chips tread water
FTSE today: market report - as it happened February 17, 2011
Wednesday's Market Report:
Resolution races up ahead of market update
Tuesday's Market Report:
Imagination surges up as Micro Focus melts
FTSE today: market report - as it happened February 15, 2011
Tools: Shares and Markets: News, charts, data
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