Dow, S&P lose over 2%, Nasdaq 3% as global rout deepens

New York - US stocks tumbled on Thursday as another big drop in Chinese stocks heightened worries about the world's second-largest economy and triggered another wave of selling across global equity markets.

The Dow Jones Industrial Average fell 392.41 points (2.32%) to 16 514.10.

The broad-based S&P 500 shed 47.17 (2.37%) at 1 943.09, while the Nasdaq Composite Index sank 146.34 (3.03%) to 4 689.43.

For the second time in four days, trading in China was halted early by circuit breakers after a seven percent stocks plunge. Also rattling investors was the Chinese central bank's weakening of the yuan currency to a five-year low.

Sentiment was further dampened by a new 12-year low in US benchmark oil, which fell 70 cents to $33.27 a barrel. Dow member Chevron lost 3.5% while mid-sized producers Apache and Anadarko Petroleum shed 5.1% and 8.4%, respectively.

Michael James, managing director of equity trading at Wedbush Securities, said negative momentum is driving much of the selling.

"Right now the mentality is reduced-risk exposure across the board," he said. "The fear is that things could worsen and I'd rather be selling now in advance of any potential weakening of indices."

James said Friday's US jobs report for December could have a stabilizing effect if it is positive, but a bad report probably would spark more selling. Analysts expect the US economy added 200 000 jobs during the month, modestly fewer than in November.

Technology stocks were badly hit. Apple slid 4.2%, Amazon 3.9%, Facebook 4.9% and Google parent Alphabet 2.3%.

Banking shares also suffered, with Dow members JPMorgan Chase and Goldman Sachs losing 4.0% and 3.1%, respectively, and Citigroup and Morgan Stanley both shedding about 5.0%.

Exceptions to the carnage included Wal-Mart Stores, which rose 2.3% and has rallied in early 2016 after badly underperforming the market last year.

Macy's rose 2.1% as it unveiled $400m in job cuts and store closures following a disappointing holiday shopping season.

Walgreens Boots Alliance advanced 1.9% as the pharmacy chain lifted its full-year forecast after first-quarter earnings bested analyst expectations.