Equities on both side of the Atlantic sank overnight amid concern about US interest rate policy, a surprise profit warning from Adidas and a decision by Argentina to default on its debt.
Shares of Germany's Adidas tanked 15.5 per cent after the company unexpectedly downgraded its full-year earnings outlook citing recent developments in Russia and lower demand for its golf products. Rival Nike's shares also dropped for the second-largest per cent decline in the Dow Jones Industrial Average.
"The profit warning could almost have been predicted but the extent of it is catastrophic," Ingo Speich, a fund manager at Union Investment which is the 10th-biggest investor in Adidas with a 1.2 per cent stake, told Reuters. "Unfavourable conditions are no excuse. Nike is stealing Adidas' thunder in important markets."
Also weighing on markets was Argentina's debt default, which reignited concern that it might not take much for euro-zone countries to slip back into a credit crisis.
"The default ties back to the spectre of what's going on in Portugal, and it all reminds people that the euro-zone crisis from years ago may not be fully resolved," Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio, told Reuters.