CSR shares were down as much as 15 cents, or 7.5%, to $1.85 in early trading after the company cut its profit profit forecast.

Only one out of the top 200 shares were higher in early trading. Medical equipment maker, Resmed, gained as much as 22 cents, or 4.3%, to $5.30.

"The market has fully eroded all the gains from Monday," said Rick Klusman of Aequs Securities. "We're a long way from being out of the woods."

"The contagion is starting to spread from banks to the corporate world."

''Banks are saying to corporate customers: 'We don't want you as a customer any more,''' said Mr Klusman.

"If corporations are having trouble getting additional funds to cover wages and tax bills for peak periods of their expenditure, this could turn even messier than where it is now."

Mr Klusman said several fund managers told him this morning the market is the worst they've ever seen.

"And it could get worse yet."

The Australian dollar dropped overnight, retreating towards the lows reached during last week's market turmoil. It bought 65.60 US cents at 10am, after falling below 65 US cents at 8.30 this morning, Against the yen it at 65.45, after touching 64.71.

Ord Minnett private client adviser James Drohan expects a "big bloodbath" today.

"The markets are trading on fear of the unknown and the unknown now is how bad the recession in the US is going to be," Mr Drohan said.

Overnight, retail sales came in lower than expected in the US, as did a reading of business activity in the state of New York.

"The markets are beginning to price in an extended and deep recession in the US," he said.

"Most markets are pricing in a significant reduction in consumption."

Base metals dropped in overnight trade as well, pointing to lowered growth expectations, which will hit resource stocks today.

Mr Drohan said the only companies that may fare decently today are ones that benefit from the weak Australian dollar for the purposes of exports.

But those companies might just be hit "less hard", he said.

Concerns about maintaining growth in the Australian economy have taken centre stage at the Reserve Bank and with the Government in recent weeks.

Earlier this month, the RBA shocked the market by cutting interest rates one full percentage point to 6%. Late yesterday the market was betting on a half point rate cut when the central bank meets on November 4.

The Federal Government announced Tuesday a $10.4 billion stimulus package aimed at keeping families and pensioners spending money over the next half year, in the hopes of minimizing the chances of a recession hitting Australia.

Both demand for commodities and their prices are falling, undercutting a key source of revenue for the Australian economy.

The market will get a more detail on how companies are coping with Ten Network reporting its annual results, today.

Woodside Petroleum releases its third quarter report.

Asciano chief financial officer Peter McGregor is scheduled to address the American Chamber of Commerce in Australia on ''Rail's Place in Australia's Freight Future''.

At 6.59am, the December Share Price Index futures contract on the Sydney Futures Exchange was down 301 points at 4084, pointing to a loss of 7% for the spot market when it opens.