Stocks worldwide retreated in volatile trade again Tuesday after Japan's Nikkei index plunged 5.4 percent and oil prices tumbled again.
Big swings in bourses in both Europe and New York revealed continued unease over a darkening economic outlook as investors pummelled shares of global commodity producers and European banks.
"The market is trying to find a floor," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.
"We still believe this volatility is going to continue until commodity prices settle down, and that hasn't happened yet."
The global day opened on a downcast note with the Nikkei notching its steepest fall in percentage terms since June 2013.
The Japanese selloff came as the yen advanced and Japanese government bond yields turned negative as investors rushed into safe investments.
"There was nothing good about the market today," said Makoto Sengoku at Tokai Tokyo Securities. "And I think there is going to be more turbulence ahead."
The pain was not as bad in Europe, with leading bourses rallying somewhat from session lows. Yet Paris' CAC ended down 1.7 percent, while the German DAX lost 1.1 percent and Britain’s FTSE shed 1.0 percent.
Sentiment in Europe was dented by German data showing an unexpected drop in industrial production in December and falls in German exports and imports.
US stocks swayed in and out of positive territory throughout the day before ending modestly lower, with the S&P 500 shedding a scant 0.1 percent.
US investors were looking ahead to Wednesday's congressional testimony of Federal Reserve Chair Janet Yellen. The hope is that Yellen will send dovish signals about future moves on interest rates.
But if Yellen takes a hard line on further interest rate increases, "then stocks will sell off," Skrainka said.
- European banks slide -
European banks remained pressured with France's Societe Generale and Germany's Commerzbank both sinking 4.4 percent and Britain's Lloyds losing 2.1 percent.
Embattled German giant Deutsche Bank tried to offer reassurances it has sufficient cash to pay its riskiest debts, issuing a letter to employees that it is financially "rock solid." But the stock still lost another 4.3 percent, adding to a 9.5 percent plunge Monday.
Commodity and energy shares endured another pounding, with German steelmaker ThyssenKrupp losing 3.6 percent, British-listed mining giant Anglo American sinking 11.3 percent and French oil services company Technip falling 5.0 percent.
US petroleum-linked shares were also weak, with Chevron falling 3.6 percent and Anadarko Petroleum diving 7.0 percent after announcing it was cutting its dividend.
- Key figures around 2200 GMT -
New York - Dow: DOWN 0.1 percent at 16,014.38 (close)
New York - S&P 500: DOWN 0.1 percent at 1,852.21 (close)
New York - Nasdaq: DOWN 0.4 percent at 4,268.76 (close)
London - FTSE 100: DOWN 1.0 percent at 5,632.19 points (close)
Frankfurt - DAX 30: DOWN 1.1 percent at 8,879.40 (close)
Paris - CAC 40: DOWN 1.7 percent at 3,997.54 points (close)
EURO STOXX 50: DOWN 1.8 percent at 2,736.50 (close)
Tokyo - Nikkei 225: DOWN 5.4 percent at 16,085.44 (close)
Euro/dollar: UP at $1.1293 from $1.1193 on Monday
Dollar/yen: DOWN at 115.14 yen from 115.84 yen