NEW YORK, Sept 23: The bloodbath on world stock markets intensified on Monday following another stream of grim corporate and economic news, pushing Wall Street down towards its July nadir and leaving European markets at levels not seen in five or six years.

The Dow Jones industrials sank 171.24 points (2.14 per cent) to 7,814.78 and the Nasdaq composite slumped 32.13 points (2.63 per cent) to 1,188.96 at 1515 GMT. The Standard and Poor’s 500 fell 17.02 points (2.01 per cent) to 828.37.

Traders said that if the markets slip past key psychological July 23 closing levels — widely thought to be the “bottom” for the bear market — it would further undermine investor confidence and prompt further selling.

Those levels were 7,702.34 for the Dow, 1,229.05 for the Nasdaq and 797.71 for the S and P 500.

A larger-than-expected fall in the US index of leading economic indicators did little to foster any positive sentiment.

The losses were even bigger in Europe, where stocks dived to new multi-year lows amid worries over corporate earnings and the implications of a wafer-thin victory in the German national election by Chancellor Gerhard Schroeder.

Across the 12-nation euro zone, the Euro Stoxx 50 index tumbled 3.8 per cent to 2,219.8 points in late trading, putting the index on course for its weakest close since May 1997, as a renewed slide on Wall Street piled on the misery.

“The bottom line is no confidence over earnings, so the market’s taking one big dive again,” said BNP Paribas European equity strategist David Thwaites in London.

“I think at the moment there’s just not enough confidence about economic recovery, corporate earnings to really be sure where the floor is,” he told AFP.

The British FTSE 100 index fell 3.1 per cent to 3,739.4 points — its lowest close in more than six years — while the French CAC 40 index tumbled 3.3 per cent to 2,794.3 points — a five-year closing low.

The German DAX 30 index endured a torrid session, plunging 4.9 per cent to 2,916.5 points in late deals to a new five-and-a-half-year low.

European financial stocks were in a particularly sick state as concerns about banks’ bad-loan provisions and the need for insurance companies to raise fresh capital to protect their solvency ratios weighed on sentiment.—AFP