KEY POINTS:
The sharemarket had fallen around 1.3 per cent by mid afternoon today, following the trend of other markets that fell heavily when New Zealand had its Waitangi Day holiday.
The NZSX-50 benchmark index was down 51 points to 3639 at 2.20pm.
Wall Street stocks were dumped nearly 3 per cent on Tuesday in the biggest one-day fall in Wall Street for 11 months. Other markets caught the bearish tone with the Australian market off 3.2 per cent.
Today, US stocks again fell. The Dow Jones Industrial average closing closed unofficially down 66.41 points, or 0.54 per cent, at 12,198.72 as concerns about impending recession lingered.
10.30am PRICES
Lead stock Telecom, which tomorrow is expected to report a 25 per cent drop in its half year net profit, was down 7c to 403.
No 2, Fletcher Building, expected to be hit hard by the downturn in US building starts, was down 19c to 963, while No 3 Contact Energy was down 6c to 775.
Auckland Airport was down 5c to 265 as doubts gather about the likelihood of a successful takeover.
Other stocks fell across the board with only a few gainers in the top 50, including Tourism Holdings, 2c to 204, Sanford, 2c to 397, and Goodman Fielder, 6c to 208.
NZ Oil and Gas fell 4c to 112 in response to falling world oil prices.
Others to fall sharply included Fisher & Paykel Healthcare, 7c to 295, Pumpkin Patch, 5c to 238 and Ryman, 3c to 179.
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In the US, analysts said many investors, still uneasy about the economy, sold off after a Federal Reserve official suggested rising inflation could prevent the bank from making further interest rate cuts.
Although the economic slowdown is a big concern, "we must not lose sight of the other part of the Fed's dual mandate - which is price stability," Federal Reserve Bank of Philadelphia president Charles Plosser said, according to Dow Jones Newswires.
The economy has been weakening but costs remain high, leading some economists to believe that the United States is headed for a troubling predicament known as stagflation.
"It just shows you the market's really skittish and temperamental," said Jim Herrick, director of equity trading at Baird & Co. "I really believe the market is driven by emotion, that there's this want to test the lows again."
- NZPA