U.S. stock index futures turned sharply negative on Wednesday despite coordinated action to cut rates across the globe to fight the danger of the world economy being hit by a steep recession.
The Federal Reserve cut the rate by half a percentage point to 1.50 percent while the European Central Bank cut by the same amount to 3.75 percent.
Dow futures had rebounded as much as 300 points off their lows, but that lasted less than two hours.
The initial wave of euphoria was short-lived.
"I think the consensus here is this won't work," Jim Paulson, of Wells Capital Management, said on CBNC. "It just gives you a sense that they keep running out of bullets.
"If we have to use a bullet a day just to keep from going down--I think we've got to get to next week and we've got to get that $700 billion (government rescue) package, start buying something, and that has the essence of maybe turning this around."
Energy prices briefly rebounded, with crude turning slightly positive, before heading lower again and below $90 a barrel.
On the bright side, there was a sense of a market change in the stock downturn following the rate cut.
"The fact that we reversed here opens up the possibility of a washout today," said Art Cashin, director of floor operations for UBS. "Watch the tape. If they turn, if they get high volume on a reversal, they could close up on the day and that could be just what you need."
Apart from the rate cut, Morgan Stanley shares gained more than 2 percent premarket after Mitsbushi Financial Group said plans remain on track to infuse the investment bank with $9 billion in capital.
But Bank of America , which preannounced disappointing earnings Monday, tumbled more than 14 percent.
Other bank stocks that got an initial boost from the interest rate announcement also changed course. Citigroup lost 2.7 percent in premarket trade, while Goldman Sachs dropped more than 4 percent and JPMorgan Chase fell more than 1 percent.
The UK government announced a rescue package for banks under which at least 200 billion pounds ($350 billion) will be made available to financial institutions, plagued by bad debts and a crisis of confidence.
Britain said it would inject up to 50 billion pounds ($87.2 billion) of government money into the country's banks as part of a multibillion pound package to shore up the financial system.
It is unclear what can soothe investors; sellers drove the Nikkei down 9.4 percent, its biggest one-day percentage fall since the crash of October 1987 while Hong Kong's Hang Seng index was down 8 percent
Some analysts said monetary easing may do the trick, if the Bank of England announces a rate cut at its meeting on Thursday in combination with the measures already announced.
"To stabilize the UK banking stocks, you also have to look at interest rates," Michael Browne from Sofaer Global Research told "Squawk Box Europe".
News from outside the banking sector did not contribute to lifting the investors' spirit.
Discount retailer Costcosaid net income was $397.8 million, or 90 cents per share, for the fiscal fourth quarter ended Aug 31, compared with $372.4 million, or 83 cents per share, a year earlier. But analysts, on average, had expected earnings of 93 cents per share, according to Reuters Estimates.
Costco shares slipped about 3 percent.
Aluminum producer Alcoaposted a lower-than-expected quarterly profit on Tuesday after the bell, citing softening demand in the key aerospace and auto sectors, and said it was halting major capital projects in the face of uncertain markets. Alcoa shares fell 2.5 percent premarket.
Toyota Motor will likely post a 40 percent slide in annual profit, missing its profit estimates on weak sales in North America and slower growth in China, the Nikkei business daily reported.
Volvo, owned by Ford Motor, said on Wednesday it plans to shed 3,300 jobs in addition to cuts announced earlier this year due to a drastic decline in auto markets. Ford shares gained 4 percent premarket.
In retail, JCPenney shares slid 4 percent after the company said its same-store sales tumbled more than 10 percent and would face tough going ahead.
Above the gloom, though, Wal-Mart said its sales at stores open at least a year gained 2.4 percent, sending its shares up more than 1 percent.