Plummeting stocks across the Atlantic caused the FTSE 100 to slide in the late afternoon, finally closing 102.5 points down, or 1.61%, to 6274.3.
Broker downgrades slammed mortgage lenders, with Northern Rock crumbling – 38.5 points down, or 5.26%, to 693.5.
Tate & Lyle was hit hard on profit taking, falling 26.5 points, or 4.72%, to 535.5.
Alliance & Leicester was another downgraded, leading it to drop 47 points, or 4.44%, to 1011.
Vedanta Resources pretty much kept the solid gains it made in the morning all day, it posted the only significant gain, up 48 points, or 2.68%, to 1840.
In New York, stocks are taking a battering this morning as investors reacted to a record home sales fall in July.
The Dow Jones is currently down 189 points, or 1.41%, to 13259.86.
American Express pretty much has wiped off all the solid gains it made yesterday, down 1.72 points so far, or 2.83%, to 59.05.
J.P. Morgan Chase, the third largest US bank, is also in freefall, 1.07 points down, or 2.36%, to 44.23.
Verizon Communications is also lower, down 0.98 points, or 2.3%, to 41.69.
To emphasise how much Wall Street is struggling this morning, no Dow Jones stock is up at this stage.
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