Global stock prices sank Friday after the Dow Jones industrials on Wall Street plummeted more than 1,000 points, deepening a week-long sell-off. Markets followed US stocks down after the Dow, coming off a record high, entered a correction—or a 10% decline from its latest peak—for the first time in two years. In early trading, France's CAC 40 lost 0.4% to 5,144.35, adding to Thursday's 2% decline, and London's FTSE 100 shed 0.3% on top of the previous day's 1.5% retreat, the AP reports. Germany's DAX was unchanged. Asian markets fell more sharply. The Shanghai Composite Index tumbled 5.5% before ending the day down 4% at 3,129.85. Tokyo's Nikkei 225 lost 2.3% to 21,382.62 and Hong Kong's Hang Seng retreated 3.1% to 29,507.63.
On Wall Street, futures for the Dow and Standard & Poor's 500 index were up an unusually large 0.7%, suggesting traders might be trying to take advantage of lower prices to buy. Financial analysts regard corrections as a normal event but say the latest unusually abrupt plunge might have been triggered by a combination of events that rattled investors. Those included worries about a potential rise in US inflation or interest rates and whether budget disputes in Washington might lead to another government shutdown. "With financial markets vulnerable at the moment, this was not great timing for such political brinksmanship," said Rob Carnell of ING. As feared, the government shut down at midnight after Sen. Rand Paul delayed a vote on a spending deal.