Wall Street is expected to open lower today as stock index futures slid before the start of trading.
S&P 500 futures declined 12.10 points, Dow Jones industrial average futures was down 101 points and Nasdaq 100 futures lost 19.25 points.
The bad sentiment has been coloured by a report that mortgage buyers Freddie Mac and Fannie Mae could be taken over by the US government.
A new record oil price of $145.98 a barrel also contributed to the market's fears.
Wall Street's opening - at 2.30pm UK time - could well dampen the London stock exchange, which has already strayed into bear market territory.
The FTSE 100 fell as low as 5302.8 today, more than 100 points down on yesterday and well below the official bear market signpost of 5385, 20% lower than the 12-month peak achieved back in October.
Miners and oil companies continued to be among the FTSE's biggest gainers thanks to the rising oil price and an increase in metal values.
Buy-to-let lender Bradford & Bingley has risen as high as 51.5p today - not far short of the 55p at which its rights issue is priced.
