Stocks on Wall St fell on Monday after the three major credit ratings agencies issued new warnings that European leaders have failed to take the coordinated action necessary to tackle the region's debt crisis.
Worries about the deal worked out at the European summit on Friday and a lower revenue outlook by Intel, also took a toll.
The Dow Jones Index was down 212 points, or 1.7%, at 11,973. The Nasdaq Composite was down 46 points, or 1.7%, at 2601.
Earlier, the DAX in Frankfurt fell 3.4%, the CAC 40 in Paris fell 2.6% and the FTSE 100 in London shed 1.8%.
The Australian 200 Index rose 50 points, or 1.2 percent, to close at 4253 on Monday. The NZX 50 rose 28 points to close at 3300.
At 8.17am on Tuesday, the New Zealand dollar was trading at 76.22 US cents, 75.72 Australian cents, 48.95 pence, 59.35 yen and 0.5789 euro. The Trade Weighted Index was at 68.08.
Brent crude oil was trading at $US108.50 per barrel and gold was trading at $US1660 per ounce.