Wall Street tumbled to its worst one-day loss in two months. Financials and commodity stocks led the slide as the majority of sectors finished lower.
In economic news, the World Bank predicted global growth would contract by 2.9% versus the 1.7% contraction forecast previously. The bank also said global trade is predicted to fall 9.7% this year.
The Dow Jones slid 200.72 points, or 2.35%, to 8,339.01, the S&P’s 500 shed 28.19 points, or 3.06%, to 893.04 and the NASDAQ lost 61.28 points, or 3.35%, to 1,766.19.
Financials plummeted, with Bank of America, JPMorgan and Wells Fargo falling 9.7%, 6.1% and 7% respectively.
Citigroup and Morgan Stanley sank 5.4% and 5.8%.
Goldman Sachs 4.3% shed, while American Express slid 5.7%. American International Group slumped 9.2%.
Energy stocks felt the pain as the price of crude reached a two week low. NYMEX light crude oil for July delivery fell US$2.62, or 3.8%, to settle at US$66.93 a barrel.
Exxon Mobil, Chevron and ConocoPhillips fell 3.1%, 3.4% and 5.9%.
Aluminium company Alcoa sank 9%.
Tech stocks fell below the line after a rally Friday. Apple slid 1.5% despite selling 1 million copies of its new iPhone 3GS in the first three days it was on sale.
Microsoft and IBM dropped 3.3% and 1.3% respectively.
Yahoo! and Google slid 6.9% and 3%, while Hewlett-Packard dipped 1.6%.
Retailers struggled, although Wal-Mart managed to finish 0.9% above the line. Costco and Target lost 1.7% and 0.3%.
COMEX gold for August delivery dropped US$15.20 to settle at US$921 an ounce.
European Markets
European stocks fell as the World Bank cut its forecast for global growth. Losses were widespread as falling commodity prices dragged the miners lower.
The UK benchmark FTSE 100 lost 111.88, or 2.57% at 4,234.05. France’s CAC40 shed 98.02, or 3.04% to 3,123.25, while the German DAX fell 146.06, or 3.02%, to 4,693.40.
Energy stocks were among the biggest losers. BG Group, Royal Dutch Shell and BP slid 6.1%, 4% and 3.8% respectively.
Total weakened 3.3%.
Fears demand for materials could fall saw the price of metals drop, resulting in a sell-off of the miners. Antofagasta and Xstrata sank 7% and 6.7%.
Aussie peers BHP Billiton and Rio Tinto shed 4.3% and 3.8%.
Anglo American bucked the trend adding 4.6%. It was revealed this morning (AEST) that the company has rejected Xstrata's merger proposal.
Concerns regarding an economic recovery also saw a drop in the financials. Barclays, Lloyds and Royal Bank of Scotland lost 3.7%, 3.1% and 3.4%.
French banks BNP Paribas and Societe Generale fell 3.8% and 3.7%, while Germany’s Deutsche Bank slumped 6.8%.
Insurers AXA, Allianz and Prudential shed 4%, 3.9% and 3.3%.
Japanese Markets
Japanese stocks climbed on increasing confidence within the manufacturing sector and a rebound in demand for services. Brewers and carmakers were among the biggest gainers.
The Nikkei 225 added 40.01 or 0.41% to 9,826.27.
Brewer Sapporo spiked 18.4% following an analyst upgrade, while rival Kirin rose 1.8%.
Automaker Nissan jumped 5.6%, while Honda Motor was down 1.2%.
Fuji Electric and Furukawa Electric climbed 12% and 7.4% after reports they might combine to develop a power chip for hybrid vehicles that will control battery use.
Oil driller Inpex fell 2.4% on lower crude prices.
Hong Kong Markets
Hong Kong shares rose on optimism of expansion in China’s key industries. Financials led the rally, while property stocks were also stronger.
The Hang Seng added 138.62, or 0.77%, to 18,059.55.
China Construction Bank, China Life Insurance and Ping An Insurance gained 0.9%, 0.4% and 0.4% respectively.
Industrial & Commercial Bank of China and Bank of China added 3.3% and 2%.
Angang Steel and Maanshan Iron & Steel put on 1.5% and 5.4%, while China Metal Recycling spiked 22% on its first day of trading.
Sun Hung Kai Properties was 3.4% stronger following reports it had sold five properties. Sino-Ocean Land advanced 5.3%.
