US stocks drop as Volkswagen weighs on automakers

US stocks tumbled early today, following European markets sharply lower as the Volkswagen emissions scandal hit shares of major automakers.

About 35 minutes into trade, the Dow Jones Industrial Average was at 16,342.96, down 167.23 points (1.01 per cent).

The broad-based S&P 500 fell 19.77 (1.01 per cent) to 1,947.20, while the tech-rich Nasdaq Composite Index dropped 58.00 (1.20 per cent) to 4,770.96.

Leading European bourses, including Paris and Frankfurt, were down about three percent as sentiment was dented by the snowballing scandal over Volkswagen's clean-air cheating device in its diesel cars.

General Motors fell 2.6 per cent and Ford 3.0 per cent. US-traded shares of Fiat Chrysler Automobiles slid 5.1 per cent.

Bank of America dipped 0.9 percent ahead of a shareholder vote on whether chief executive Brian Moynihan will keep his title as chairman of the board.

Dow member Goldman Sachs lost 1.9 per cent as chief executive Lloyd Blankfein discloses he will be treated for lymphoma. Blankfein said he has a curable form of the blood cancer and that the prognosis is good.

Con-Agra Foods fell 3.7 per cent after the food giant warned earnings would be negatively impacted by the strong dollar and higher marketing costs.

Auto-parts company AutoZone rose 2.3 per cent after reporting that fourth-quarter net income rose 7.4 per cent to USD 401.1 million behind a 4.5 per cent rise in same-store sales.

Bond prices rose. The yield on the 10-year US Treasury dipped to 2.16 per cent from 2.20 per cent Monday, while the 30-year dropped to 2.97 per cent from 3.02 per cent.  Bond prices and yields move inversely.