Bear territory as billions wiped from markets
• World share are falling sharply, along with global oil prices.
• There are fears the world's economies are headed for recession as China slows
• Some experts say the markets aren't expecting a recession in the US - just that the recovery is still so fragile there could be one.
• World shares have now fallen 20 per cent from last year's high - taking them into what is described as 'bear territory'.
Energy stocks are leading another sell-off on Wall Street as the price of oil continues to plunge. US crude dropped 2 percent to just under $28 a barrel in New York in early trading.
Dropping energy prices is a sign that the global economy is slowing down. Oil and gas stocks fell more than the rest of the market in early trading.
The Dow Jones industrial average lost 377 points, or 2.4 percent, to 15,639 as of 1:55 p.m. Eastern time. It was down as much as 565 points earlier. The Standard & Poor's 500 index fell 39 points, or 2.1 percent, to 1,842.
The Nasdaq composite index sank 54 points, or 1.2 percent, to 4,423.
The Dow and S&P 500 are down 10 percent so far in January; the Nasdaq is down 12 percent. The losses were widespread; all 10 of the S&P 500's industrial sectors were in the red.
Bloomberg has reported this morning that the MSCI All-Country World Index (made up of the world's major sharemarkets) fell 2.6 percent at 1:47 p.m. in New York, bringing its drop from a May record up to the 20 percent threshold for a bear market.
More than US$15 trillion has been erased from the value of global equities in the period, according to data compiled by Bloomberg.
• New Zealand shares fell yesterday joining a regionwide sell-off as international sentiment continues to drive the local market. Mighty River Power, Spark New Zealand and Steel & Tube Holdings all dropped.
The S&P/NZX 50 slipped 10.5 points, or 0.2 percent to 6113.72. Within the index 20 stocks fell, 25 rose, and five were unchanged. Turnover was $138 million.
UK shares fell too, giving up their gains from the previous session, as a downbeat outlook from mining stock BHP Billiton cast a gloomy shadow over a battered sector. BHP Billiton said that it expected no recovery in iron ore or coal prices in the next few years, with global markets suffering from oversupply and a slowdown in China, the world's biggest metals consumer.