US open: Markets slide as IMF cuts growth forecast

US stocks opened lower on Tuesday, after the International Monetary Fund (IMF) warned of “frothy” stocks amid signs of declining growth in Europe and cut its growth forecast.

Early trading put the S&P 500 on course to decline for the second consecutive day and has so far fallen 2.3% since reaching a record level on 18 September.

The IMF cut its outlook for global growth in 2015 and warned that increasing geopolitical tension and financial market correction could pose a threat to the stability of the markets. The IMF added that a prolonged spell of policy interest rates near zero in advanced economies could lead to “overheating” in some financial markets.

There was negative news from the Eurozone too, with data released on Tuesday showing that German industrial production fell the most since 2009, highlighting the risk of economic stagnation in Europe’s largest economy.

In corporate news, Sodastream International fell sharply ahead of the bell, as the soft drinks maker warned of a quarterly-sales decline, while the Container Store sank after the firm announced late on Monday it was cutting its profit and sales view.

Amazon retreat slightly in the wake of news coming from Brussels that the European Commission opened an investigation over the company’s tax agreement with Luxembourg, while Agco fell significantly after weaker-than-expected demand forced the firm to cut its profit outlook for the year.

Christopher & Banks shares plummeted after the company said its quarterly sales will fall well below Wall Street’s estimate.

The 10-year Treasury note was down four basis points to 2.39, while the 30-year-bond yield fell by a similar margin to 3.09 and the five-year treasury note dropped four basis points to 1.66.

The dollar was in retreat against the pound and the yen but registered a marginal gain against the euro after losing over a percentage against the currency on Monday.

West Texas Intermediate crude fell early and was trading below $90 a barrel.