As Britain puts its suitcases into storage, the tourist industry faced up to the fact that seriously dark clouds are on the horizon. If Thomas Cook is the barometer, its fall of 10.2p to a record low of 127.6p proved the point.

Dermot Blastland, UK chief of TUI Travel, down 2.6p to 174.8p, confirmed the gloom at a conference in London. He said: “There will be less overseas travel with the weaker pound, high fuel costs and the poor economy. We do not see a lot of growth. People are trading down and the most economically challenged families may be exiting the market.” TUI said earlier this week that it was cutting its UK winter capacity by 28 per cent, but it is buoyed by the hope that its German parent will buy the rest of the company in six months’ time.

Thomas Cook’s 59 per cent German parent, the retail group Arcandor, may have to sell down its stake as pressure on its own cashflows mounts.

The FTSE 100 dived 94.03 to a five-and-a-half-year low of 3,780.96.

Miners, the hardest hit on Thursday, enjoyed a dead cat bounce as metals prices stabilised and short-sellers closed positions for the weekend. Vedanta Resources rose 62¼p to 450p and Antofagasta 35¾p to 354¾p. However, worries that battered insurers would need cash calls failed to ease. Legal & General fell another 3.2p to 57.1p and Prudential lost another 1p at 245p. Old Mutual dropped 3.9p to 45p.

Even supposedly defensive pharmaceuticals were not immune from profit-taking, with AstraZeneca the worst blue-chip performer, down 214p at £22.45, as it continued to suffer from worries over a challenge to its asthma drug. GlaxoSmithKline fell 80p to £10.72. Shire dropped 58½p to 838p.

Hammerson, part owner of the Bullring in Birmingham, fell 45p to 480p amid concern about its high debt and exposure to retail tenants.

In the FTSE 250, DSG International recovered 2¼p to 13p after Credit Suisse, a long-time bear on the stock, upgraded it to “outperform” with a 25p price target, saying that its trading statement next Thursday should give reassurance that it was not about to breach bank covenants. There is talk that it will close or sell its loss-making Electro World chain in Eastern Europe, Greece and Turkey.

Short closing also helped the rival Kesa Electricals to bounce 3p to 64p despite Credit Suisse cutting its price target to 55p. John Lewis revealed plunging electrical sales this week.

St Modwen Properties continued to rebound from record lows, up 8½p to 99¼p, after a reassuring trading statement on Thursday.

Mecom fell 0.4p to 1.9p after Axel Springer said it was interested only in Mecom’s Polish newspapers, and not in a bid. Investec, which recently gave warning of rising bad debt, fell 37¾p to 217½p after its South African and Australian arms announced job cuts.

EasyJet gained 23¾p to 256p after Société Générale upgraded it to “hold”, from “sell”, with a lowered 225p target, saying that a boardroom spat with Sir Stelios Haji-Ioannou had already taken enough off the price.

- New York: Stocks ended a volatile week by surging on reports that Barack Obama has picked Timothy Geithner, president of the Federal Reserve Bank of New York, to be Treasury Secretary, lifting a big uncertainty from markets. The Dow Jones industrial average closed up 494.13 at 8,046.42.

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