The Dow Jones has opened 110 points down on the back of the Libyan unrest.
The US market was closed yesterday for President's Day, meaning that the stock market falls seen elsewhere had not impacted on the American stocks.
The Dow Jones Industrial Average stood at 12,280 just after 2:30, having closed on Friday at 12,391. Expectations were for a 120 point initial fall.
Ben Critchley, sales trader at IG Index, said: "With the US closed on Monday, we have yet to see the true reaction of US investors to global events so it is likely to make for a volatile session this afternoon."
The FTSE 100 has meanwhile made up some ground on its earlier losses. It is down 36 points at 2:30pm, at 5,978.
