A last hour wave of selling saw US markets plunge sharply, setting up what will be yet another day of red ink in Australia and other Asian markets.
Our market will start lower after the share price futures market lost 28 points in that late slide this morning.
But watch iron ore (see the separate story on China’s imports). The spot price jumped 4.9% to $US84.17 a tonne overnight. Its now up more than ^% in the past two days.
That will help push the prices of BHP Billiton, Rio Tinto, Fortescue and a clutch of smaller operators higher, but not Arrium where the shares will be pressured by a huge short fall in its recent capital raising.
The ASX 200 Index and the All Ordinaries Index each dropped 0.6% yesterday to 5155.5 points and 5153.1 points respectively.
The ASX200 is down 8.9% since its 2014 peak in early September. (A correction is a drop of 10% or more off then most recent high).
The Aussie dollar was trading around 87.70 US cents this morning, close to its highs for the last 24 hours.
Weakening energy stocks helped push Wall Street lower after European markets traded lower in early traded, then recovered to close the day with reasonable gains, except the Italian market which fell.
Tech stocks also turned lower with Apple shedding 1%, despite reports of solid sales for the iPhone 6, which starts selling in China on Friday.
Since Thursday, the main indexes have posted the largest three-day declines since late 2011.
Gold rose $US13 an ounce to $US1,235, but oil prices again sold off with the ket US marker crude, West Texas losing 1% to end at just under $US85 a barrel. Brent oil fell 1.6% to $US88.64, close to a new four year low.
The Dow lost 223.03 points, or 1.35%, to 16,321.07, after being down less than 50 points at one stage in late dealings.
The Standard & Poor’s 500 index shed 31.39 points, or 1.65% to end at to 1,874.74 and below its 200 day average for the first time since November 2012, a development chart-driven investors reckon means more selling to come.
The S&P 500 is now down 6.8% since its peak in September.
And the tech heavy Nasdaq Composite fell 62.58 points, or 1.46%, to 4,213.66.
US market confidence will be tested tonight, our time by earnings reports from a slew of big financials, led by Citigroup, Bank of America, Amex, Blackrock and key tech stocks, eBay and Netflix, which is one of the few m,arket darlings still high on investors lists.
