Oil falls to USD 62.65 per barrel despite OPEC output cut

Energy companies also tumbled, dragged down by the more than USD 3 drop in the price of oil. The Dow Jones industrial average was down 312.62 points, or 3.60 percent, at 8,378.63. The Standard & Poor's 500 Index was down 31.50 points, or 3.47 percent, at 876.61

News that existing-home sales in the United States rose 5.5 percent last month - the biggest gain since July 2003 - helped put a floor under sentiment since the housing market has been at the center of the economic troubles.

The recent turmoil, however, has lowered the bar for a "good day" on Wall Street.

World stocks, measured by MSCI's all-country world index, were down 4.22 percent but had trimmed their losses after hitting five-year lows during the session. Investors dumped emerging market stocks with particular vigor, pushing them down 7.83 percent.

European shares had their lowest close since mid-2003, with the FTSEurofirst 300 index of top European shares closing down 4.93 percent at 829.73 points. Japan's Nikkei tumbled 9.6 percent by the close of trading in Tokyo.