Investors were dealt a crushing blow on Monday when the Dow Jones index depreciated for a second day in a row, leaving the Dow 30 in the red.
The industrial index opened at 25,337.87 yesterday before crashing by almost 5 percent to a low of 23,923.88.
The stock markets have not witnessed such drastic losses since the US Congress rejected a $700billion bailout of the banks, post-financial crash, in September 2008.
The Dow Jones closed at 9pm UK time (4pm EST) at 24,345.75 points, down 4.60 percent.
Stock markets in Asia sank overnight sank, with the Nikkei closing at 4.7 percent down.
The FTSE 100 opened 3.5 percent down today, down 253.95 to 7,081.03, although it had bounced back to 7,210.14 at 10.52am.
Investors are now looking ahead to see if the Dow Jones will crash further when it opens at 9.30am EST (2.30pm GMT).
Here are the latest expert opinions, Dow Jones updates and live forecasts for the US stock market and other financial
Tuesday February 6
11.15am: Investors panicked as Dow Jones predicted to open 1,000 points down after Dow futures goes into red
Analysts are predicting another dismal day of trading for Wall Street with some estimating a fall of 1,000 points for the Dow Jones.
Scott Redler, partner with T3Live.com, said the best situations for US markets would be a drop on opening followed by a reversal on large volume.
He said: “That could create a ‘turnaround Tuesday’ which would relieve some pressure.
“It’s too early to say the highs of the year is in. But it’s also too early to say a 10 percent corrective move off the highs will be enough.”
The Dow Jones opens at 9.30am EST (2.30pm GMT) today.
10.30am: Market slide set to continue, analyst says
James Hughes, Chief Market Analyst, AxiTrader, said: “This morning we have seen Europe follow suit by posting big downside losses with the FTSE and Dax both down over 3 percent.
“Dow futures are also showing signs that this downside is likely to continue into Tuesday’s session with the Dow already down another 400 points.
“There is very little due out on a macroeconomic front today, which is actually bad news. In situations like this we would want to find something to take the attention away from the downside, and maybe see a positive number.
“One thing to remember about the recent falls is that the economy is in a good place in the US, with Christine Lagarde only raising the outlook for global GDP two weeks ago in Davos. The question will be asked whether this is a market correction or a something more sinister for the global economy?
“A 1000+ fall will give people flash backs of 2007-2008, however economically we are not in the same position so I do not think that is a fear. So far this is just a long awaited stock market correction, one that could have a lot further to go. When an asset flies higher in value so aggressively, the fall is always equally as quick.”
9.05am: FTSE 250 also down by 2 percent
Big losses are affecting the FTSE 250 too, which is down by 2 percent to 19,290.06.
Transport company stagecoach dropped by almost 9 percent, followed by online retailer Ocado, which fell by 7 percent.
8.50am: London’s FTSE falls by 3.5 percent after brutal plummets in Asia overnight
The FTSE 100 joined other languishing trading markets today opening at 7,081.03, down 253.95 points or 3.5 percent.
Across Europe, Germany’s Dax plummeted by 2.7 percent and the Cac 40 in France was languishing 2.1 percent lower.
It is expected to be another terrible trading for financial markets after Tokyo’s Nikkei dropped 2.5 percent while Hong Kong’s Hang Seng Index plunged 5 percent lower.
Kat Hopps takes over live reporting from Sebastian Kettley.
04.43am: US Sock Futures Extend Fall
This is down almost three per cent from US close on Monday
04.47am: Afternoon trading underway in Japan
Losses on the Nikkei 225 index now passed 6 per cent.
The index was at 21,243.15 points, a decline of 1438.93 points since yesterday.
03.08am: Dow futures continue sliding
Dow futures market continue sliding to 1,000+ point drop when Dow opens tomorrow.
Stock figures slid into the negative in Monday evening trade.
Dow futures were down 633 points, and S&P 500 futures were lower by 57 points.
Based on futures, the implied open for Dow is 1,010.75.
02.49am: At 02.00am GMT all major stock exchanged have fallen
Tokyo Nikkei 225: DOWN 5.1 per cent at 21,529.19
Hong Kong Hang Seng: DOWN 3.2 per cent at 31,225.11
Shanghai Composite: DOWN 2.1 per cent at 3,415.86
New York DOW: DOWN 4.6 per cent at 24,345.75 (close)
New York S&P 500: DOWN 4.1 per cent at 2,648.94 (close)
London FTSE 100: DOWN 1.5 per cent at 7,334.98 (close)
00.58: Nikkei 225 index plummets by nearly 100 points
After half an hour of trading in Japan, the Nikkei 225 index has dropped 4.28% to 21,710.20 which is a fall of 971.88 points.
Monday February 5
10.48pm: Analyst warns turbulent periods ahead
A chief economist at Deutsche Bank is certain that the markets are headed for rocky period, but will ultimately weather the storm.
Torsten Slok, said: The allocation of money from risky assets to risk-free assets is going to be bumpy, as seen in markets today.
“Fundamentally, we expect such episodic bouts of turbulence, but the underlying economic expansion will continue.”
Meanwhile Quincy Krosby, chief market strategist at Prudential Financial, said: “This sell-off, in the bigger scheme of things, is not that big. But it is very important in psychological terms.”
10.34pm: The markets are ‘re-calibrating’ argues investment analyst
Richard Bernstein, CEO of Richard Bernstein Advisors in New York, said that today’s events are a fine-tuning of the markets.
Mr Bernstein said: “I think what you’re getting is a re-calibration in both the bond and stock markets.
“Nobody can time short-term corrections.
“The question is whether you’re heading for a multi-quarter curl-your-toes market in equities and that’s not on our radar.”
10.24pm: Senior investors urge clients not to panic over Dow crash
Austin Frye, CEO of Frye Financial Center, told his clients that the index crash was overdue and bound to happen sooner or later.
He said: “We have our nervous clients who normally call on pullbacks, and that group is calling.
“We’ve been talking to them all afternoon.
“I tell them them the market, on average, has a 5% drop twice a year, and that we haven’t had one in a year and a half.
“I also tell them that if they buy after a big drop, in the long term, they will never be disappointed.”
Dow Jones index: The Dow 30 suffered casualties across the board today
10pm: Stock markets were ‘tipped over the edge’
David Kelly, the chief global strategist for JPMorgan Asset Management argued that the stock markets were pushed over the edge by over-indulgence.
Mr Kelly said: “It’s like a kid at a child’s party who, after an afternoon of cake and ice cream, eats one more cookie and that puts them over the edge.”
Meanwhile deputy White House Press Secretary Raj Shah, urged investors to remain calm in the wake of the crash.
He said: “Markets do fluctuate in the short term. We all know that. And they do that for number of reasons. But the fundamentals of this economy are very strong and they’re headed in the right direction — for the middle class, in particular.”
9.50pm: Dow 30 suffered heavy casualties
All 30 companies listed on the Dow Index are in the red after the stock markets closed in New York.
Exxon Mobil Corp lunged by 5.44 percent, alongside the 3M Company down by 5.60 percent.
Apple and Disney suffered similarly at losses of 2.79 percent and 3.68 percent respectively.
Other major losses were suffered by Boeing Company, down 5.74 percent, and Viagra manufacturer Pfizer Inc, down 5.30 percent.