NEW YORK (REUTERS) - Wall Street looked set for another rout on Monday following a more-than 8 per cent drop in Chinese shares and a selloff in oil and other commodities, with the Dow set to open below 16,000 for the first time since February 2014.
Stock futures were in a free-fall, with Nasdaq futures halted briefly after hitting a circuit breaker, a step taken by exchanges to reduce volatility and give investors time to assess information.
The S&P 500 and Nasdaq composite indexes were poised to slip into correction territory, or 10 per cent off their 52-week highs. The Dow Jones industrial average and the Nasdaq 100 slid into a correction zone on Friday.
The Dow futures held about 700 points lower, with the S&P futures off about 80 points, and the Nasdaq 100 futures off about 5 per cent, which marks the lower end of the price limit.
The major averages are on track for one of their worst opens since the financial crisis of 2008.
Apple shares slid 5.8 per cent to US$99.61 in premarket trading and were set to open at their lowest this year.
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 4 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 4 per cent in premarket trading. US oil and gas stocks have already lost about US$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 US dollar index fell 1.1 per cent to US$93.92 as the probability of a September rate hike receded.
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 US Federal Reserve.
European stocks were down 4.8 per cent, wiping out more than 400 billion euros ($460 billion) of market value. Asian stocks slumped to 3-year lows as the 3-month-long rout in Chinese equities threatened to get out of hand.
Netflix fell 12 per cent to US$91.50 in premarket trading.
Alibaba fell 8.9 per cent to US$63.99, well below its IPO price of US$68, making it the second high-profile tech company to fall below its IPO price in the past week after Twitter on Thursday.