* Dow Futures fall about 850 points in Asian trading
* VIX at highest level since August 2015
* European bourses down about 2 pct; Nikkei falls to 4-month lows
* Futures down: Dow 237 pts, S&P 16 pts, Nasdaq 32.50 pts (Adds details, comment, updates prices)
Feb 6 (Reuters) - Dow futures pointed to a third straight day of losses on Tuesday, deepening a correction to the stock market's long-running rally that saw the biggest intraday fall in history for the Dow Jones Industrial Average on Monday. At 7:16 a.m. ET (1216 GMT), Dow e-minis were down 267 points, or 1.12 percent, with 184,051 contracts changing hands. They had fallen about 850 points in Asian trading.
S&P 500 e-minis were down 16 points, or 0.61 percent, with 1,054,865 contracts traded.
Nasdaq 100 e-minis were down 32.5 points, or 0.51 percent, on volume of 189,356 contracts.
Both the S&P 500 and the Dow Industrials slumped more than 4 percent on Monday, their biggest falls since August 2011. The Dow notched its biggest intraday decline in history with a nearly 1,600-point drop.
The CBOE Volatility index, a measure of expected swings in the S&P 500, jumped to 50.30, its highest level since August 2015, on Tuesday.
Wall Street's plunge sent shudders across global financial markets. Europe's main bourses were down around 2 percent while Japan's Nikkei dived 4.7 percent, its worst fall since November 2016, to four-month lows.
"It is hard to say (if the selloff will deepen today). A lot of people were surprised by yesterday's action. The sharp drop in the afternoon seemed to be mainly programmed trading," said Scott Brown, chief economist at Raymond James.
"These kinds of corrections are a normal process. Where the bottom is I don't know but the fundamentals haven't changed."
The stock market has been on a bull run for the past nine years, helped by a growing economy, strong corporate earnings and an extremely loose monetary policy by central banks.
U.S. share values have also climbed further since President Donald Trump's election on the prospect of tax cuts, corporate deregulation and infrastructure spending, and the S&P 500 is still up 23.8 percent since his victory.
However, some investors say the market is over-stretched in the context of rising bond yields as central banks withdraw their easy money policies of recent years.
Benchmark 10-year note yields had surged to 2.885 percent, the highest since January 2014 but fell back to 2.707 percent on Monday as the stock selloff hastened.
Bonds have been roiled in the past week on fears that the Federal Reserve will need to adopt a more aggressive rate hike policy as inflation picks up.
Data on Friday showed the year-on-year increase in average hourly earnings rose to 2.9 percent, the largest rise since June 2009.
Investors feared a rise in bond yields would lead the central bank to be more aggressive in raising interest rates, which in turn could slow down growth. Currently, the central bank has indicated it expects to raise rates three times in 2018.
Investors will keep an eye on comments from St. Louis Fed President James Bullard who will give a presentation on the U.S. economy and monetary policy.
(Reporting by Tanya Agrawal; Editing by Arun Koyyur)