Wall Street braces for more big losses after China rout

Crude oil prices also fell to a new 12-year low at $33 per barrel, worsening investor worries.

Investors have been jittery as markets got off to their worst four-day start to a year and economists slashed fourth-quarter USA growth estimates.

At 9:38 am ET (1438 GMT), the Dow Jones industrial average was down 250.25 points, or 1.48 percent, at 16,656.26, the S&P 500 was down 28.88 points, or 1.45 percent, at 1,961.38 and the Nasdaq Composite index was down 84.10 points, or 1.74 percent, at 4,751.66.

Nasdaq led the day’s decline and Amazon, down 5.8 per cent at $636.99, weighed the most on the S&P 500 and Nasdaq, while the Nasdaq Biotech Index dropped 3.2 per cent.

The drop in the CSI300 index – which covers the Shanghai and Shenzhen bourses – for the first time triggered an automatic early closure under a “circuit breaker” mechanism to curb volatility, after an earlier 15-minute trading halt failed to stem the declines.

Investors across the world joined the sell off. In London, the FTSE 100 lost 2.4%, its worst opening day to a new year in 16 years and the second-worst on record.

Tesla fell 6.9 per cent to $223.41.

Fitbit was down 2.5 percent at $24.30 after the wearable fitness device maker’s new smartwatch failed to impress.

The CSI300 index and the Shanghai Composite index both closed up 2 percent, capping off a week of tumult.

Legendary US billionaire investor George Soros has warned that 2016 could see a global financial crisis on as big a scale as that seen just eight years ago.

In currencies, the euro was up 0.7% against the dollar at $1.0929, while the dollar fell sharply against the yen, down 1.1% at Yen119.0060.

Thursday’s battering of the markets followed a similar pounding on Wednesday and was the third negative trading session out of four in the new year. The S&P 500 and Nasdaq were each down 0.1%. Past instances when momentum stocks – defined as the ones showing the biggest gains in the last six to 12 months – won have occurred closer to the end of rallies than the beginning, signaling indiscriminate buying at a time when more traditional share drivers such as earnings growth are starting to wane. Compounding woes from China the latest report on the state of the he manufacturing sector from the Institute for Supply Management (ISM) proved weaker than expected. “The outlook still looks reasonable and I would take any weakness to selectively buy, especially in the consumer and housing market recovery area”.

There are no major economic data due to be out on Tuesday. It marks the 10th month in a row of sub-50 readings, which indicate deceleration.