European shares were sharply lower in early trading. Britain's FTSE 100 dropped 3.2 percent to 5,121.71 and Germany's DAX stumbled 3.4 percent to 5,249.80. France's CAC-40 fell 3.6 percent to 2,830.87.
Ahead of the opening bell, Wall Street was bracing for losses. Dow Jones industrial futures were down 1.1 percent at 10,886 and S&P 500 futures shed 1.3 percent to 1,141.10.
Shares in Asia tumbled earlier in the day. Japan's Nikkei 225 fell 2.1 percent to close at 8,560.26. South Korea's Kospi slid 2.9 percent to 1,800.55. Hong Kong's Hang Seng dived 4.9 percent to 17,911.95. Australia's S&P/ASX 200 was 2.6 percent down at 3,964.90.
Energy shares in Australia plummeted amid fears of a global recession. BHP Billiton, the world's largest mining company, lost 4 percent. Rival Rio Tinto Ltd. plunged 6.5 percent. OZ Minerals dropped 7.7 percent.
In Hong Kong, blue chip property developers were jolted by losses. China Resources Land Ltd. tumbled 7.7 percent while China Overseas Land & Investment slid 6.5 percent. China Vanke Co. lost 8.5 percent.
Stocks Market News & Analysis sept 22 2011
Investors were beginning to despair over the U.S. economy despite an announcement by the Fed of a new bond-buying program meant to stimulate lending and growth.
"What we could or should do has already been done _ and it still hasn't supported the market. Nothing can help the market. So it feels very dangerous.a session of heavy selling as the world reacts to the Fed's downbeat outlook for the US economy.
In a highly anticipated move, the Fed on Wednesday announced it would buy long-term Treasury bonds to help the U.S. economy. But Wall Street stocks fell anyway because the U.S. central bank made it clear that a full U.S. economic recovery was likely years away. Stocks recently have been extremely volatile over fears of another recession.
The Fed said after a two-day meeting that it would buy long-term Treasurys and sell short-term. The move is intended to drive down interest rates on long-term government debt, and could lower rates on mortgages and other loans. It surprised investors when it said it would include more 30-year bonds in its purchases than expected.
The Fed said it would buy $400 billion in 6-year to 30-year Treasurys by June 2012. Over the same period, it planned to sell $400 billion of Treasurys maturing in 3 years or less.
The inclusion of more 30-year bonds than expected means the Fed saw the need to keep very long-term rates lower for an extended period. Many analysts viewed the move as an acknowledgment that the U.S. economy's problems are long-term.
The Fed also bleakly stated that the economy has "significant downside risks" and that a number of problems won't be easily solved, including high unemployment and a depressed housing market.
On top of that: a sovereign-debt crisis in Europe that is threatening to bankrupt Greece, cause Italy to default on debts and infect the continent's banking system. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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