British shares steady on U.S. gains as airlines drop

* FTSE 100 (FTSE: ^FTSE - news) trades flat

* Wall Street rise fuels afternoon recovery

* Airlines among top fallers after Ryanair's profit warning

* Syria concerns keep investors on edge

(Updates)

By Alistair Smout

LONDON, Sept 4 (Reuters) - Britain's top share index

steadied on Wednesday, paring early losses after a stronger open

in the United States but dogged by an airline sector weakened by

a profit warning from budget carrier Ryanair.

The FTSE 100, which had been 0.6 percent lower at

midday, retraced its losses entirely in the first hour of

trading on Wall Street, where a rally in the tech sector drove

gains.

While stocks have fallen since late July, UK blue chips have

outperformed the S&P 500 over that period. U.S. stocks

had also missed out on strong gains in Europe on Monday due to

the Labor Day holiday.

"The U.S. market was hit a bit harder on the way down, so

there's a correction on that side, which in turn can help in

Europe," Toby Morris, senior trader at CMC Markets, said.

The FTSE 100 was trading down just 1.75 points at 6,466.66

at 1445 GMT.

Worries about disruption from possible U.S. strike on Syria

and a weak update from Ryanair set a weak tone for the

day for UK-listed airlines.

Budget airline easyJet, which reports traffic

numbers on Thursday, fell 6.3 percent while British Airways

parent IAG dropped 3.5 percent.

"The market is certainly keeping its eyes on Syria... and if

oil prices stay high, airlines would suffer further from that.

Ryanair had a profit warning, and easyJet is a very similar

airline, so there's concern that easyJet's numbers may follow

suit," Lee Armitage, senior trader at Accendo Markets, said.

"It could be a case of easyJet attracting Ryanair's

customers, but there are concerns that we may see even more

underwhelming figures from the sector."

Shares in the Irish airline, which said it could miss its

full-year profit forecast, sank 14 percent.

The FTSE 100 failed to recover the 6,500 level which it fell

through on Tuesday, when shares dropped 0.6 percent against a

backdrop of investor concern over Syria.

Late on Tuesday, leaders of the U.S. Senate Foreign

Relations Committee reached an agreement on a draft

authorisation for the use of force in Syria, paving the way for

a vote on Wednesday.

Also weighing on the UK market was a fall in the value of

stocks trading without rights to their latest dividend,

including Resolution, TUI Travel (LSE: TT.L - news) , and BHP

Billiton, which took 4.23 points off the index.

Johnson Matthey (LSE: JMAT.L - news) led gainers, up 1.9 percent after a

target price upgrade from JP Morgan (Other OTC: JPYYL - news) .

(Editing by John Stonestreet)