Share and commodity markets plunged worldwide in the wake of a credit rating downgrade of Greece to junk status.
Standard & Poor's downgraded Greece three notches, saying the cash-strapped government's policy options are narrowing because of weak economic growth prospects. Portugal was downgraded two notches for the same reasons.
On Wall Street, major indexes slumped more than 2% in the worst day for stocks since early February. Earlier, European markets dropped an average of more than 3%.
Most commodities also fell, along with the euro, which plunged against the dollar and the yen.
The Dow Jones Industrial Average dropped 213.04 points, or 1.9%, to crash through the 11,000 level to finish at 10,991.99, its biggest drop since Fenruary 4.
The S&P 500-stock index plunged 2.3% to below the key 1200 level to close at 1183.71 while the Nasdaq Composite Index was down 2.0% at 2471.47.
Alcoa was the Dow's worst performer with a drop of 3.8%. Economically sensitive components slid, including Caterpillar, with a drop of 3.5%, and General Electric, down 2.4%.
Other markets: Europe, Asia down
Greece's benchmark index plunged 6% and stock markets of other highly indebted euro-zone countries tumbled as worries about their financial health grew.
Banking stocks suffered the brunt of the selling elsewhere in Europe, with their large holdings of government debt and sensitivity to domestic economies. BNP Paribas fell 7%, and CrC)dit Agricole declined 6.4%.
Commodity producers also tumbled, and even defensive food producers declined. Rio Tinto shares dropped 5.2% and Nestlé shares lost 1%.
The Greek ASE Composite Index plunged 6% to 1698.68, its lowest close since April 1, 2009. The market had closed before S&P issued its downgrade.
The pan-European Stoxx Europe 600 index tumbled 3.1% to 261.65. The French CAC-40 index dropped 3.8% to 3844.60, the German DAX index lost 2.7% to 6159.51 and the UK FTSE 100 index fell 2.6% to 5503.52.
Most major Asian markets declined, with Chinese and Hong Kong stocks weighed by fears Beijing may launch more measures to cool property prices.
Japanese shares firmed on upbeat forecasts from Fanuc and IHI Corp. The Nikkei Stock Average of 225 Companies ended 0.4% higher at 11,212.66.
Australia's S&P/ASX 200 ended flat at 4880.02 as trading resumed after Monday's holiday, Korea's Kospi slipped 0.2% 1749.55, Hong Kong's Hang Seng Index shed 1.5% to 21,261.79, China's Shanghai Composite lost 2.1% to 2901.93 and Taiwan's Taiex slid 0.1% to 8146.44.
India's Sensex dropped 0.3% to 17,690.62 and Singapore's Straits Times gave up 0.4% to 2991.68.
Commodities: Oil down, gold up
Several benchmark commodities sold off after the credit ratings drops in Greece and Portugal.
Oil and copper were already trading lower on worries that the Chinese government will have some success in reining in the country's economic growth.
Light, sweet crude oil for May delivery in New York was down $US1.85, or 2.2%, at $US82.35 a barrel.
Gold, on the other hand, reversed losses and traded 0.6% higher at $US1,160.50 an ounce in New York.
The most-active June gold was up $US4.50, or 0.4%, to $US1158.40 an ounce in New York. Nearby but lightly traded April gold was up $US8, or 0.7%, to $US1161.50.
Currencies: Euro down; dollar, yen up
The euro plummeted against the dollar and yen as fears that a sovereign-debt crisis could spread across the euro zone led investors to flee riskier assets.
The dollar gained against most currencies on the move to safety, but it dropped below ¥93 as the yen, considered the safest of havens, surged.
Other currencies closely tied to global growth and investor sentiment dropped sharply, with the Canadian dollar losing more than 1.6% against the U.S. dollar. The Australian dollar slipped more than 1%.
The euro was at $US1.3216 from $US1.3368 late on Monday. The dollar was at ¥92.94 from ¥94.01, while the euro was at ¥123.00 from ¥125.68.
The UK pound fell to $US1.5267 from $US1.5458.
Wed, 28 Apr 2010