The Dow Jones has dived more than 3% this morning as General Motors plummets on news President Obama may allow one of the US auto giants to go under.
After just over an hour of trading, the blue chip index was 244.84 points lower, or 3.15%, to 7,531.34.
The poor US start has damaged an already negative day for London's FTSE, down 106.13 points, or 2.72% to 3,792.72.
In the US, just a day after Barack Obama asked General Motors boss Rick Wagoner to resign, the President said no more blank cheques would be written for GM and beleaguered rival Chrysler and did not rule out bankruptcy for the troubled firms.
GM has dived on the news, down 25.14% to $2.71.
Financials are also struggling, with Bank of America 12.4% behind to $6.43 and Citigroup 10.31% lower to $2.35. No Dow stocks are in the black so far.
In the UK, financials are also dragging down the index of leading stocks, with Barclays 13.69% down to 150p.
Insurer Aviva is 13.4% behind to 205.25p and Lloyds Banking Group is 13.14% lower to 66.10p.
Telecommunications giant Vodafone is among the few in positive territory, up 1.72% to 118.30p.IFAonline
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