Bleak Monday turns into Black Monday as world markets collapse; US equities in late recovery; dollar surges, gold up; corn, soy, ethanol hit daily trading limits

Black Monday is unfolding across world markets, as investors flee equities and commodities, fearing recession and a drag on corporate profits, and demand for energy.

At the New York Stock Exchange, the Dow Jones Industrials have been falling rapidly since market open, although a mid morning rally raised the Index to nearly 10,000 points after dropping to 9800 shortly after opening. The Index lost nearly 300 points between 1:30pm and 2:30pm and at 2:30 was down 700 points, or 6.75 percent, at 9622.33. It recovered to 9884.93, down 440.45 (-4.27 percent) by 3.30pm.

The Euro fell to $1.34 against the US dollar as fears of European recession and banking system trauma, and a flight to quality, prompted demand for dollars.

At NYMEX, oil has dropped to below $90 a barrel on recessionary fears.

At the Chicago Board of Trade, biofuels commodities — soybean oil, corn and ethanol, dropped rapidly to their maximum daily loss limits. Corn plunged the maximum of 30 cents, to $4.24 for the December 2008 contract. Soy oil fell the limit of $2.70 to 39.30 cents per pound, while ethanol dropped the daily limit of 15 cents to $1.835 for the November 2008 contract. With freefalls causing daily trading limits to be reached, selling pressure is almost certainly not relieved at the CBOT.

In Brazil, trading was halted in equities after the main index fell more than 15 percent.

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