Major European stock exchanges posted sharp losses, with the London FTSE 100 losing 1.22% to close at 6,630.90.
In Paris the CAC 40 shed 1.4% to finish at 6,019, while in Frankfurt the DAX also gave up 1.4% to end the day at 7,965.
BA was down 2.9% to 441.8p, but Marks & Spencer added 1.4% to 650.1p after a trading statement showed sales growth was not as bad as had been feared.
Continuing weakness in banking shares hit the Dublin market particularly hard. The ISEQ finished down 150 to 9,282. AIB dropped 41 cent to €20.39. This followed profits warnings from a number of US regional banks yesterday. AIB has a stake in another US bank M&T.
Irish Life & Permanent also fell 72 to €18.20. Food group Glanbia dropped six to €3.96 after a trading statement was cautious on its outlook for 2007.
US stocks fell in morning trade as a profit warning from a key retailer dented sentiment and investors awaited Federal Reserve chairman Ben Bernanke comments for clues on the economy.
The Dow Jones, which came within a few points of its all-time record on Monday, was down 0.33% to 13,605. The Nasdaq shed 0.45% to 2,658. Trading was cautious with Bernanke due to deliver remarks later in the day, possibly offering clues on the US central bank's next move on interest rates.
Retail giant Home Depot warned of lower-than-expected profits and Sears Holdings said that same-store sales over the past nine weeks fell 3.9%.
Japanese share prices closed slightly lower as investors cashed in Monday's gains. The Nikkei index slipped nine points to 18,253. Hong Kong’s Hang Seng index closed up 68 points at 22,886.
