Wall Street in further sell-off

US stocks reverse gains from open, move lower on weak housing data.

United States stocks have failed to find any momentum despite rebounding slightly at open following Friday's 2% rout. A fall in new home sales data saw markets turn lower in early afternoon trade as concerns around emerging market economies persisted.

The 7% drop in new home sales was much worse than analysts had forecast.

Investors were also showing signs of caution ahead of a meeting of the US central bank's Federal Open Market Committee later this week. At the meeting the Federal Reserve is widely tipped to again reduce the size of its bond-buying program.

At 0445 AEDT, the Dow Jones Industrial Average was down 62.68 points, or 0.39%, at 15,816.43.

The broad-based S&P 500 gave up 12.58 points, or 0.70%, to 1,777.71, while the tech-rich Nasdaq Composite Index sunk 61.28 points, or 1.48%, lower to 4,066.89.

Earlier, analysts were cautious about the gains seen at the opening.

"It is evident that Friday's selling isn't carrying over," Patrick O'Hare of Briefing.com said of the early sentiment.

"It could get going again, especially if the early bounce peters out in a hurry, but it's basically a touch-and-go test right now of the market's buy-the-dip conviction."

Markets in Europe were led lower by London's FTSE, which lost close to 2 per cent in part due to the quashing of rumours that US telco AT&T would buy Vodafone Group and also on a soft update from oil & gas giant BG Group.

Other markets in the region were not as harshly dealt with, though none of the major indices registered gains.

A rare bright spot was seen in Germany, where business confidence rose above forecasts and the country's central bank indicated it was confident of strong growth in the first quarter.

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