The Standard & Poor's 500 Index fell as much as 8.4 percent, the most since Oct. 26, 1987, as 490 companies declined. The MSCI World Index of 23 developed markets sank 5.9 percent, the steepest decline in the measure's 38-year history. Trading on Brazil's Bovespa was halted after the main stock index plummeted 10 percent.
The Dow Jones Industrial Average fell 6.7% per cent to 10,372 and the Nasdaq Composite Index fell 9.1% per cent to 1,983.
The MSCI World Index of 25 developed markets lost 73.86 points to 1,176.51, giving it the steepest intraday percentage retreat since its creation in 1970. The MSCI All-Country World Index of 48 nations lost up to 6 percent, the most in its 21-year history.
The U.K.'s FTSE 100 Index has lost 15 percent in September, the steepest monthly drop since the October 1987 stock-market crash. India's Sensitive index tumbled 3.8 percent, Russia's Micex Index fell 5.5 percent and Brazil's Bovespa slumped 7.1 percent.
Canada's S&P/TSX Composite Index has fallen 16 percent in 2008, giving it the best performance among the 23 nations MSCI considers developed markets.