The Dow Jones Industrial Average fell 144.91 points (1.21 per cent) to 11,806.18 in the first five minutes, coming back slightly from sharper opening losses.

The Nasdaq composite tumbled 39.84 points (1.80 per cent) to 2,172.65 and the Standard & Poor's 500 index retreated 20.95 points (1.63 per cent) to 1,267.19.

An emergency on Sunday cut by the US Federal Reserve to its discount rate and a weekend deal for JPMorgan Chase to buy investment bank Bear Stearns at a fire-sale price added to a sense of crisis sweeping through global markets.

'Gloom and doom are extremely high,' said Mr Al Goldman, market strategist at AG Edwards.

'We have a good chance to see 'get me out at any price selling' early today and very few buyers. This will create gap declines and a very attractive buying opportunity.' -- AFP