Wall Street in Free-Fall; All Three Indices in Correction

Wall Street opened sharply lower on Monday with the Dow Jones industrial average losing more than 1,000 points - sliding below 16,000 for the first time since February 2014 - following a more than 8 per cent drop in Chinese shares and a selloff in oil and other commodities.

The Dow has never lost more than 800 points in a day.

Futures on the Nasdaq, S&P and Dow indexes were halted briefly before the market opened after hitting a circuit breaker, a step taken by exchanges to reduce volatility and give investors time to assess information.

With Monday's selloff, the S&P 500 index and the Nasdaq Composite slipped into correction mode, joining the Dow, which slid into correction territory on Friday.

An index is considered to be in correction when it falls 10 per cent from its 52-week high.

The New York Stock Exchange invoked a rule saying market makers don't have to disseminate price indications before the opening bell in an effort to make it easier and faster to open stocks on a volatile trading day.

At 1338 GMT (7:08 p.m. in India), the Dow Jones industrial average was down 830.66 points, or 5.05 per cent, at 15,629.09, the S&P 500 was down 91.46 points, or 4.64 per cent, at 1,879.43 and the Nasdaq Composite was down 282.50 points, or 6 per cent, at 4,423.54.

All 10 major S&P 500 sectors fell, with health and technology falling more than 6 per cent. All stocks in the Dow were in the red.

The S&P 500 index showed 132 new 52-week lows and just two highs, while the Nasdaq recorded 504 new lows and two new highs.

Apple shares slid as much as 13 per cent to hit a low of $92, losing nearly $80 billion of market value. The stock later recovered to trade at $99.50, down 5.8 per cent.

The lack of new measures from Beijing to support Chinese stocks following an 11 per cent drop last week sparked a plunge in global equities and a selloff in oil and commodities.

Oil fell more than 5 per cent to a 6-1/2-year low, while London copper and aluminum futures hit their lowest since 2009.

Oil majors Exxon and Chevron fell about 6.6 per cent. US oil and gas stocks have already lost about $310 billion of market value this year.

"Until we have some sign that China and the emerging markets aren't being sucked into some vortex from which they can't recover ... it is unlikely this selloff will stem," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

The dollar index fell 2 per cent to a 7-month low as the probability of a September rate hike receded.

Traders now see a 24 per cent chance that the Fed will increase rates in September, down from 30 percent late on Friday and 46 percent a week earlier, Tullett Prebon data showed.

Wall Street's selloff last week showed investors are becoming increasingly nervous about paying high prices for stocks at a time of minimal earnings growth, tumbling energy prices, and an expected rate hike by the Federal Reserve.

Netflix fell 13.4 per cent to $90.37.

Alibaba fell 13.5 per cent to $58.16, well below its IPO price of $68, making it the second high-profile tech company to fall below its IPO price in the past week after Twitter on Thursday.

Declining issues outnumbered advancing ones on the NYSE by 1,438 to 22. On the Nasdaq, 2,550 issues fell and 134 advanced.

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