US trading was once again marked by sharp moves on heavy volume. For a fifth straight day, the Dow industrials fluctuated in a range of more than 400 points.
The losses came against the backdrop of recent weak US economic data, the United States losing its triple-A credit rating from Standard & Poor's and the inability of lawmakers to address worries that another recession may be on the way.
New Zealand shares recovered some ground today, having been caught up earlier in another global market slide as fear returned to Wall Street.
Goldman Sachs New Zealand economist Philip Borkin said his US colleagues now saw a one in three chance the United States would fall back into recession.
The fiscal stimulus put in place during the global financial crisis was winding down and fiscal policy would turn quite contractionary, he said.
"Despite the weaker dollar the US current account deficit is deteriorating and is expected to continue to do so. Unfortunately that means a higher New Zealand dollar and as a result we are becoming a lot more cautious about the manufacturing and tourism sectors as a result," Borkin said.