US stocks extended losses overnight as data showing an unexpected rise in weekly jobless claims refuelled recovery fears in the world's biggest economy.
The Dow Jones Industrial Average dropped 107.24 points (1.03 per cent) to 10,271.59 in opening trades.
The tech-rich Nasdaq composite index slumped 41.42 points (1.87 per cent) to 2167.38 while the broader S&P 500 index fell 12.67 points (1.16 per cent) at 1076.80.
"The mood is a sombre one as market participants adjust to a new risk profile," analyst Kimberly DuBord of Briefing.com said in a note.
Data released before the market opening showed US jobless benefits jumped unexpectedly last week to the highest level in about six months, fuelling concerns unemployment could dampen recovery.
Initial claims climbed by 2000 to 484,000 in the week to August 7 from the previous week's upwardly revised figure of 482,000.
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Most economists had expected 465,000 new claims.
The four-week moving average for the claims, a less volatile indicator than the week-to-week figures, rose to 473,000, an increase of 14,250 from the previous week's revised average of 459,250.
Yesterday, Wall Street nosedived as data showing the US trade gap had widened sharply in June - to the highest level in 20 months - piled on top of an already gloomy outlook by the Federal Reserve.
The Dow Jones Industrial Average tumbled 2.49 per cent, posting its worst percentage drop in nearly a month.
Stock markets across the world also slid overnight as many investors ditched risky assets in favour of safe-haven trades amid rising fears of a second-dip recession.
Shoppers are choosy in shaky economyUS shares down on weak data
