The Dow Jones industrials index tumbled almost 200 points yesterday in a worldwide shares slide triggered by a market panic in Hong Kong and deteriorating economic conditions throughout South-east Asia.
The Dow fell 186.88 points to 7,847.77 after twice falling nearly 230 points during the afternoon.
The ripples from the financial avalanche in Hong Kong took a heavier toll on other overseas markets. The Nikkei fell 3 per cent in Japan, which exports heavily to South-east Asia. In Europe Frankfurt's DAX index fell 4.7 per cent and the FTSE-100 fell 3.1 per cent.
But US Treasury bonds shot higher, sending interest rates sharply lower and cushioning US equity markets as investors at home and abroad sought out the perceived safety of fixed-income securities and a stable US economy.
The worldwide downturn was triggered by a shocking 10 per cent tumble in the Hang Seng index in Hong Kong that deepened fears about weakening profits for companies that depend on Asian markets for a portion of their profits.
Yesterday's slide was the latest setback in the US stock market's struggle to fully recover from a steep fall in August.
NYSE volume totalled 669.29 million shares, the third largest total ever.
The Standard and Poor's 500-stock list fell 17.80 to 950.69, the NYSE composite index fell 9.31 to 499.49, and the Nasdaq composite index fell 36.83 to 1,671.25.
