Australian shares are expected to dive sharply this morning after Wall Street and European markets fell around 4% overnight on growing fears that the euro zone's efforts to tackle its sovereign debt crisis will fall short, and potentially jeopardise the global economic recovery.

Weaker economic news on the jobs front also affected the US market. The number of Americans filing new claims for unemployment benefits rose to 471,000 from 446,000 the week before.

Continuing claims, which is the number of Americans receiving benefits for a week or more, fell to 4,625,000 from 4,665,000.

In other economic news – the Conference Board’s index of leading economic indicators slipped 0.1% in April after rising 1.3% in March. The index was expected to increase 0.2%.

And the Philadelphia Fed index rose to 21.4 in May from 20.2 in April, topping predictions for a rise to 20.7.

The Dow Jones Industrial Average closed 376 points lower at 10,068. The S&P500 Index fell 43 to 1,072 and the NASDAQ lost 94 points at 2,204.

European stocks fell. London’s FTSE is down 85 points, Paris lost 79 points and Frankfurt fell 121 points.

Asian markets are weaker. Hong Kong’s Hang Seng fell 33 points, Tokyo’s Nikkei lost 157 and China’s Shanghai Composite is down 32 points.

The Australian share market fell to a fresh eight month low yesterday. The S&P/ASX 200 Index lost 71 points at 4,317 and on the futures market the SPI200 is down 106 points. The Aussie Dollar is lower against the major currencies at 8:30AM and is 81.64 US cents, 56.81 Pence Sterling, 73.14 Yen and 65.39 Euro cents.

To company news around this morning: Shares in BHP Billiton (ASX:BHP) closed 0.6% lower yesterday to $36.75. BHP chief Marius Kloppers has launched another attack at the Rudd government's proposed resource tax. The Australian newspaper reports that Mr Kloppers says the tax has cut the value of its proposed Pilbara iron ore merger with Rio Tinto. In a dig at suggestions that Rio Tinto might try to renegotiate a bigger payment because of a surge in iron ore prices, Mr Kloppers said that argument was now swinging the other way. He’s hinted that BHP might cut the $6.9 billion equalisation payment that it’s due to pay Rio because of the resources rent tax. The joint venture is already taking longer than was originally expected to tie up because of an extended investigation by the EU competition regulator. BHP's tax experts will front the Rudd government's resource profits tax consultancy committee in Canberra today. BHP Billiton posted around a $7.2 billion net profit in the financial year to June 30 2009.

Shares in Sonic Healthcare (ASX:SHL) closed down 0.71% yesterday to $12.62. The company says it’s likely to fall short of its guidance for the 2010 financial year. The pathology and radiology provider said government cuts to the Medicare fees for pathology services since November 2009 had resulted in a revenue shortfall. In a statement to the ASX late yesterday Sonic's net profit for the 2010 financial year is now estimated to be in the range of $290 million to $295 million, slightly exceeding the prior year's profit on a constant currency basis. The Sydney-based company said in August that full-year earnings would climb as much as 15% from the $315 million posted in the previous period. Sonic blamed the downgrade in profit guidance on setbacks in its Queensland’s pathology operations related to the Medicare fee cuts and an unexpected drop in national pathology market growth levels. In the financial year to June 30 2009, Sonic Healthcare reported a net profit of $171 million.

To commodities, and the price of gold fell $4.80 to US$1,187.80 an ounce for the May contract on Comex. Silver is down 40 cents at US$17.69 and copper fell 1.5 cents to US$2.91.

And the price of oil fell $1.86 to US$68.01 a barrel for June light crude in New York.