A near-9 percent dive in China shares sent world stocks and commodity prices tumbling on Monday, and US stocks ended a volatile day with the S&P 500 and Nasdaq composite indexes sliding into correction territory.

After dropping more than 1,000 points, or almost 7 percent, at Wall Street's open, the Dow Jonesindustrial average cut its losses but still finished down 3.6 percent. The Standard & Poor's 500index closed down 3.9 percent for the day and was 11 percent lower than its May record high.

The benchmark S&P index has accumulated 9.95 percent of losses in just five sessions.

A key measure of US equity volatility, the CBOE Volatility Index, or VIX, shot above the 50 markfor the first time since 2009, dropped back near 30 and then rose to 40.

Some US investors went bargain hunting after the dip, causing at least some of the accelerated selling toward the day's end, according to Randy Frederick, managing director of trading andderivatives for Charles Schwab in Austin, Texas.

"It's a very risky proposition to take things home overnight in this kind of a market. If you got a profit that quick, it's often safer to take a small profit than run the risk," said Frederick, "If things don't settle down in China we could have another ugly open tomorrow."

Hong Kong's Hang Seng index futures were down 2 percent and Nikkei futures fell 6 percent,suggesting there may be more losses in store when trading resumes in Asia on Tuesday.

European stocks closed off 5.4 percent after Asian shares slumped to three-year lows when athree-month-long rout in Chinese equities threatened to get out of hand.

US markets had some reprieve after Europe closed but then pushed back down toward earlylows in late afternoon.

The Dow Jones industrial average closed down 588.40 points, or 3.57 percent, at 15,871.35.The Standard & Poor's 500 Index was down 77.68 points, or 3.94 percent, at 1,893.21. TheNasdaq Composite Index was down 179.79 points, or 3.82 percent, at 4,526.25.

US traders had rushed for the exits in Monday's first half-hour of trading when deepeningconcerns about a China-led global economic slowdown and tumbling commodities pricesfollowed a 5 percent decline in the S&P and Dow on Thursday and Friday.

"Anybody with a pulse was nervous when the market opened," said Michael James, managingdirector of equity trading at Wedbush Securities in Los Angeles.

Monday's trading volume was almost 14 billion shares, according to Reuters data. This wasroughly twice the 7 billion daily average for the month to date, calculated by BATS GlobalMarkets. In comparison, 10.6 billion shares changed hands in Friday's selloff.

Oil prices settled sharply down after plunging to six-and-a-half year lows. Safe-haven USgovernment and German bonds, as well as the yen and the euro, rallied as currency concernskicked in due to China's recent currency devaluation.

US crude settled down 5.5 percent at $38.24 a barrel after falling as low as $37.75 earlier. Brentsettled off 6 percent at $42.69 after falling as low as $42.51, taking both under January's lows forthe first time. Worries about weaker demand from normally resource-hungry China added toglobal supply glut concerns.

The S&P's energy sector was the weakest performer, with a 5.2 percent decline for the day.

Copper, seen as a barometer of global industrial demand, hit a six-year low, and nickel fellsharply.

The slump in Chinese stocks was their worst performance since the depths of the global financialcrisis in 2007 and wiped out what was left of 2015's gains, which in June stood at more than 50percent.

Many traders had hoped Beijing would take support measures, such as an interest rate cut, overthe weekend after China's main stock markets slumped 11 percent last week.

With serious doubts emerging about the likelihood of a US interest rate rise this year, the dollarwas down 1.6 percent against other major currencies after falling as much as 2.5 percent earlierin the day.

The Australian dollar fell to more than six-year lows and many emerging market currencies alsoplunged , while the frantic dash to safety pushed the euro to a seven-and-a-half month high ofmore than $1.17.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 5.4 percent to a more thanthree-year low. Tokyo's Nikkei ended down 4.6 percent and Australian and Indonesian shares hittwo-year troughs.

London's FTSE 100, with its large number of global miners and oil firms, ended down 4.7percent for its 10th straight decline - its worst run since 2003.

The MSCI all world stock index was off 3.8 percent at the end of the US session.

                                                      ( Source of photo and article: chinadaily.com.cn)