Stocks ended deep in the red on Tuesday as traders snatched profits amid continued volatility, uncertainty and concern in international markets over the global economic slowdown.

Initial euphoria over China's fiscal stimulus package waned on Tuesday as markets retreated with further corporate news from the US piling more misery on investors already fearful for the future of the global economy.

A plea from General Motors for financial assistance, a huge loss at insurer AIG and the bankruptcy of US electronics retailer Circuit City weighed on traders, leading to across-the-board losses on global markets.

A weaker start to Wall Street compounded the losses.

The JSE, moving in line with weaker global markets, was also weighed further by sharp losses in the resource sector and falling precious metal prices. Local banking stocks also came under pressure, possibly in reaction to the bank downgrade by global credit ratings agency Fitch.

The local bourse had little time to react to an outlook downgrade of South Africa from Standard & Poors which came just before the close and might have added to the losses.

At the bell, the JSE's all share index was down 4.53 percent, weighed by resources which were down 6.41 percent, platinum stocks which lost 4.81 percent and gold miners which were down 4.7 percent. Banks were 3.68 percent lower, financials lost 3.34 percent weaker and industrials were down 3.21 percent.

The rand was last bid at 10.24 to the dollar from 9.92 when the JSE closed on Monday, while gold was last quoted at $733.67 a troy ounce from $753.30 at the JSE's last close.

The platinum price was at $819.50/oz from its previous close of $846 and Brent crude was at $56.27 from its close of $59.08.

"Yesterday markets were up impressively and as a result of the day-to-day volatility, today markets were down quite sharply," a local trader said, adding that there was a lot of profit taking after Monday's gains.

"There is not much direction at the moment and locally markets are just following global markets," he added.

The trader said that banking stocks had come under pressure, possibly in reaction to a downgrade by Fitch.

Dow Jones Newswires reported that US stocks fell sharply Tuesday, with the Dow Jones Industrial Average down more than 200 points, as the outlooks from corporations ranging from luxury home builder Toll Brothers and coffee-shop operator Starbucks suggested consumer spending is even worse than feared.

Meanwhile, many financial stocks such as Citigroup, American Express and Goldman Sachs traded near multi-year lows as the demands on the US Treasury's rescue package seemed to grow by the hour, with Fannie Mae the latest on the list in need of assistance.

"It doesn't seem to get any better, no matter how much money they throw at the financials," said a trader at a mid-sized Wall Street firm. "Now (the crisis) has obviously contaminated the economy to a pretty severe extent, and the layoff notices are coming fast and furious. The General Motors/Chrysler/Ford Motor saga is extremely unnerving."

When the JSE closed, the Dow Jones Industrial Average was down 265, or three percent, to 8608. The broad Standard & Poor's 500 declined 27, or three percent, to 892. The Nasdaq Composite shed 44, or 2.7 percent, to 1573.

On the JSE, resources giant Anglo American lost 6.57 percent to 222.26 rand and BHP Billiton gave up 8.24 percent to 162.95 rand.

Sasol gave up 4.48 percent to 266.01 rand.

ArcelorMittal was down 11.27 percent to 77 rand and Highveld Steel gave up 1.99 percent to 62.98 rand. Kumba Iron Ore was down 8.51 percent to 135.40 rand and Exxaro shed 8.47 percent to 70.73 rand.

Platinum miner Impala Platinum was down 6.67 percent to 112 rand and Lonmin was off 10.73 percent to 167.49 rand.

Among gold miners, AngloGold Ashanti was down 5.68 percent to 178.51 rand and Gold Fields was down 4.33 percent at 66.49rand.

Among industrials, brewer SABMiller lost 5.97 percent to 145.57 rand, Barloworld gave up 7.64 percent to 54.50 rand and Bidvest was down 5.99 percent to 92.60 rand.

Among banks Standard Bank shed 3.07 percent to 74.15 rand, Nedbank was down 3.83 percent to 86.10 rand, Absa lost 4.75 percent to 92.49 rand and FirstRand gave up 4.48 percent to 13.85 rand.

Global credit ratings agency Fitch Ratings has changed the outlooks on Absa Bank, Investec Bank and Nedbank and their respective holding companies to Negative from Stable, following Monday's revision to the outlook on South Africa's sovereign Long-term foreign currency Issuer Default Rating of 'BBB+'.

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