US shares tumbled in early trading on the back of disappointing results for three major banks and reports of a significant tightening in China's monetary policy.
Less than three hours into trading, the index had plunged almost 200 points, or 1.81%, to 10,531.
Despite posting larger-than-expected Q4 losses, Bank of America was among the day's early winners, up 0.61%. The bank posted a net loss of $5.2bn as the cost of repaying its bailout emergency cash weighed heavily.
J.P. Morgan, which also posted disappointing quarterly results, was up 0.19%. Bucking the trend was Wells Fargo, which reported a profit.
Kraft Foods - fresh from its takeover of Cadbury - was among the losers, falling 2.28%, while Boeing, down 1.35%, and Microsoft, down 2.06%, also suffered.
International Business Machines Corp lost the most, plunging 3.45% to 129.5.
Meanwhile, the FTSE swung into the red during afternoon trading as mining stocks reeled from the news China has told its banks to restrict lending.
As at 1600 GMT, London's leading share index was down 1.63%, or 89 points, to 5,423.
Antofagasta, Xstrata, Lonmin, Eurasian and Vedanta were all suffering losses of 4% or more after the lunchtime trading session. Eurasion Natural Resources is down 6.48%, Xstrata has fallen 6.24%.
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