Wall Street has closed lower, with investors selling out of stocks ahead of a quarterly reporting season that is expected to reveal disappointing earnings.

The Dow Jones Industrial Average fell 0.8 per cent to 17,603.

The Nasdaq dropped 1 per cent to 4,844, while the S&P 500 also lost 1 per cent to 2,045. In early trading the Australian markets were up 0.3 per cent.

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The International Monetary Fund’s managing director Christine Lagarde has warned of increasing risks to global economic growth unless policy makers take stronger measures.

“Let me be clear: we are on alert, not alarm. There has been a loss of growth momentum,” Ms Lagarde said in her prepared remarks.

“However, if policymakers can confront the challenges and act together, the positive effects on global confidence – and the global economy – will be substantial.”

IMF head Christine Lagarde. Photo: Getty

That followed a major fall on Australian markets on Tuesday when investors had nowhere to hide in a day of heavy losses, with every sector retreating.

Energy shares were punished as oil prices continued to slide, while media stocks were dragged lower by a poor trading update from Nine Entertainment.

The All Ordinaries index lost 70 points to close at 5,000 and the ASX 200 index finished 1.4 per cent lower at 4,924.

Nine Entertainment had the biggest losses on the index — it hit an all-time low, down nearly 24 per cent to $1.16 after a disappointing quarterly update.

Nine said ratings were softer than anticipated at the start of the year, and has warned the advertising market is set to shrink by more than previously forecast.

The broadcaster said bad weather and “the standard of competition” during the summer cricket season dragged on revenue.

IMF head The gloom spread across the media sector — rival Seven West Media shed 10.5 per cent to 90 cents.

Sliding oil prices impact stocks

Energy stocks took the biggest hit on tumbling oil prices.

Overnight, European shares dropped to a six-week low, with mining and auto stocks weighing.

In London, the FTSE 100 lost 1.2 per cent to hit a three-week low, the German DAX tumbled 2.6 per cent, while France’s CAC 40 dived 2.2 per cent.

Locally, shares are set to slip at the open, with the ASX SPI 200 down 0.4 per cent to 4,889.

Meanwhile, Westpac has become the second major bank after ANZ to be hauled into courts by ASIC over allegations of a multi-billion dollar rigging of interest rate trading between April 2010 and June 2012.

Westpac said it would vigorously defend the court proceedings.

Aussie dollar weak

Checking currencies, the Australian dollar has lost 0.9 per cent, a short time ago it was worth 75.3 US cents.

The dollar dropped after the Reserve Bank of Australia yesterday kept interest rates on hold at a record low of 2 per cent.

Against other currencies, it was buying 83.1 Japanese yen, 53.2 British pence, 66.2 euro cents and $NZ1.11.

On commodities markets, spot gold dipped to $US1,230 an ounce.

West Texas crude gained half a per cent to $35.89 US a barrel after Kuwait insisted major producers will agree to freeze output later this month.

– with reporting by Rod Myer