The S&P 500 is now below the level at which it started the year, after another morning of heavy losses for blue-chips.
The S&P was off 32 points at 2,048 in lunchtime trading, while the Dow Jones industrial average tumbled 265 points to 17,083 and the Nasdaq Composite shed 112 points at 4,907.
Investors are facing a triple-whammy of slumping oil prices, tumultuous foreign exchange markets and uncertainty over when the Fed will start to crank up interest rates.
"The widespread selling amid seemingly bullish indicators, such as a relatively doveish FOMC and Greek bailout completion, shows the cynicism and anxiety surrounding markets right now," suggested Joshua Mahony, a market analyst at spread betting firm IG.
"The great worry is that China will undergo a dramatic drop in the rate of growth," suggested his colleague, David Madden.
"It used to be just Australia that would catch a cold when China sneezed, but the Chinese sell-off is far more infectious than initially thought. We won’t see the impact of the Chinese currency devaluation for a few more months, and when it does trickle down it will be painful," Madden predicted.
"The PBoC’s decision to intervene in the currency market has done little to restore confidence in the Chinese stock market, and dealers are dreading that more intervention will be required.
"The minutes from the Fed showed us that the US was worried about turmoil in the Chinese stock market even before the drop in value of the yuan, and now the outlook is even bleaker. The doveish tones from the Fed minutes have accelerated the drop in stocks because China is now even more of a concern," he concluded.
Walt Disney (NYSE:DIS) lost one twentieth of its value, after broker Sanford C. Bernstein downgraded the theme parks operator to "market perform" from "outperform".
Semi-conductor firm Micron (NASDAQ:MU) also got the downgrade treatment, for the second time this week; the latest broker lining up to change its mind about the company is Robert W. Baird, which downgraded the stock to "neutral" from "outperform" on pricing concerns.
Earlier this week Wedbush Securities also downgraded the stock.
Home décor and gift-ware seller Kirkland's (NASDAQ:KIRK) joined the list of bricks & mortar retailers having a tough time of it this week.
Shares lost a tenth of the value in the morning trading session after the retailer posted a second quarter loss, though there was good news on the sales front.
The company made a loss after tax of US$2.3mln in the 13 weeks to 1 August, more than double the loss of US$1.1mln it made in the same period of 2014.
Net sales for the period rose 11.4% to US$115.3mln from US$103.5mln the year before.
Retailer Sears Holdings (NASDAQ:SHLD), which saw its shares sold off heavily yesterday, was in the doghouse again this morning after its second quarter results failed to impress.
The company performed a sleight of hand, appearing to move back into the black, but this was only achieved as a result of one-off gains from asset sales.
The top line continues to head south, as do the shares - though a loss of just 0.9% in today's market represents some kind of victory.
Though there was plenty of blood in the street, there were some bright spots to be found, such as drugs firm Eli Lilly (NYSE:LLY), which was up US$4.08 to US$87.85 after a study indicated its Jardiance drug, designed to reduce blood sugar levels, may be useful in staving off cardiovascular death, or non-fatal myocardial infarction or non-fatal strokes.
Sector peer Valeant Pharmaceuticals (NYSE:VRX, TSE:VRX) was down in the dumps on reports it is to splash out US$1bn on Sprout Pharmaceuticals, a company that has just been granted permission to sell pills dubbed as the female version of Viagra.
Valeant's shares drooped US$9.14 to US$235.77.
Elsewhere, The Madison Square Garden Company's (NYSE:MSG) results proved not to be a crowd-pleaser.
The company reported a fourth quarter net profit of US$45.7mln, up from US$11.6mln a year earlier.
Earnings per share of 60 cents were four times the previous year's level, and well ahead of the 39 cents forecast by analysts who cover the stock. Despite this, the stock was off US$2.69 at US$77.73.