Stocks Open Lower After Global Selloff

Stocks opened lower Monday after another wave of selloffs across Asia and Europe as investors worried about a global recession.

However, the market's decline wasn't as severe as expected, given the futures activity and overseas drops this morning.

Japanese stocks tumbled to 26-year lows and most other Asian markets fell heavily in chaotic trade, while in Europe the main indexes were down between 4 and 5 percent.

“It’s a little crazy again today,” Art Cashin, director of floor operations at UBS, told CNBC. “I wish we could see a little more signs of panic. It’s the last Monday in October, it’s a perfect day for it if we could really get ‘em to throw ‘em out the window, this could be important today.”

With the carry trade unwinding the Japanese yen surged against the dollar, despite a warning from officials in the Group of Seven that its rise may unbalance the global economy.

"We are probably going to record the highest ever fall in stocks in the month of October," Angus Campbell, head of sales at Capital Spreads, told "Worldwide Exchange", adding "certainly the history books will be re-written there."

In economic news, new home sales rose 2.7 percent in September, more than expected, after falling 12.6 percent to a 17-year low in August. Still, sales were down by a third from the same time last year. The median home price fell 9.1 percent to $218,400.

In early earnings news, Verizon Communications narrowly beat estimates by posting a profit of 66 cents per share, a penny ahead of expectations. Its shares rose more than 4 percent.

Also, health-care provider Humana said its profit slipped 39 percent, but it, too, beat estimates by posting earnings of $1.49 a share, two cents better than estimates. Its shares fell.

Energy fell further, with U.S. light, sweet crude dropping about $2 a barrel, trading below $63 as the deteriorating global economy continued to weigh on prices.

The wave of stock selloffs sweeping world markets may be partially caused by the fact that many governments increased guarantees for bank deposits, making them a much safer investment, Marc Faber, author of the "Gloom, Doom and Boom Report," told CNBC Monday.

Other analysts said the current selloff has been caused by hedge funds liquidating positions.

Investors will now look to the Federal Reserve's meeting on monetary policy for further measures to contain the crisis.

"Certainly there is going to be a rate cut on Wednesday. We expect around half a percentage point," Campbell said.

More U.S. banks applied for the government's lifeline for financial institutions.

Fifth Third Bancorp , which saw its shares sink Friday amid questions about the strength of Ohio banks after rival National City agreed to be taken over, said it had applied for a $3.4 billion cash injection under a U.S. government plan.

This Week:

TUESDAY: Fed begins two-day meeting; Case-Shiller home-price index; consumer confidence; Earnings from U.S. Steel
WEDNESDAY: Weekly mortgage applications; durable goods; weekly crude inventories; Fed announcement on interest rates; Earnings from Aetna, Corning, Kellogg, Kraft, P&G, Qwest, Sony and Visa
THURSDAY: Weekly jobless claims; First look at Q3 GDP; weekly natural-gas inventories; Eanrings from AstraZeneca, Colgate Palmolive, CVS/Caremark, ExxonMobil, Motorola, Royal Dutch Shell and Electronic Arts
FRIDAY: Personal income and spending; consumer sentiment; Fed's Yellen speaks; Earnings from Chevron, Clorox and Nissan

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