Stocks in the United States plunged further on Thursday.
The Dow Jones industrial average fell below 9,000 for the first time since August 2003.
Bank and insurance stocks were hammered again.
Credit markets remained clogged. The interbank cost of borrowing dollars for any period beyond overnight rocketed -- three-month dollar Libor hit its highest this year.
Shares of General Motors fell by 31.1% to its lowest level since 1950. At the close, GM was at $US4.76.
Morgan Stanley fell by 25.9% to $US12.45 on concern about the status of a planned $US9 billion investment by Japan's top bank, Mitsubishi UFJ Financial Group Inc.
The Dow Jones industrial average dropped 678.91 points, or 7.33%, to 8,579.19,. Standard & Poor's 500 Index plummeted 75.02 points, or 7.62%, to 909.92. The Nasdaq Composite Index sank 95.21 points, or 5.47%, to 1,645.12.
The Dow has lost 2,271.47 points in the last seven trading days - the worst ever in such a period.
Trading was active on the New York Stock Exchange, with about 2.04 billion shares changing hands - above last year's estimated daily average of roughly 1.90 billion.
About 2.95 billion shares were traded on the Nasdaq, above last year's daily average of 2.17 billion.
It was a year ago on 9 October that the Dow closed at a record high above 14,000. Since then, the Dow has fallen 5,585.34 points - or almost 40%.
European shares also extended their slide on Thursday as banks and oil shares turned negative.
The pan-European FTSEurofirst 300 index ended down 2% at 921.46, having earlier hit its lowest level since November 2003.
In Frankfurt, the DAX index ended at 4887 points, down 126.62 or 2.53%.
In Paris, the CAC-40 index closed at 3442.7 points, down 54.19 or 1.55%. The Swiss market index closed at 5798.84 points, down 274.61 or 4.52%.
In Britain, the FTSE 100 closed 52.9 points weaker, down 1.2%, at 4,313.8 - its lowest close in four years after a 5.2% tumble on Wednesday.
NZ down again
The New Zealand stock market opened down again on Friday.
At 10.52am, the NZX50 index was off 68 points, or 2.3%, to 2876.