World markets sold off Friday, a day after the Dow industrials had its worst point loss since the 2008 financial crisis.
"I seems that yesterday was the day that markets finally woke up to the very real prospects of another imminent and major financial crisis," said Deutsche Bank analysts Jim Reid and Colin Tan, in a research note.
The Dow tumbled 512 points Thursday -- its ninth deepest point drop ever -- as fear about the global economy spooked investors.
The selling spilled into overseas markets early Friday.
Japan's Nikkei (N225) closed down 3.72%, while Australia's All Ordinaries (XAO) slid more than 4%.
Hong Kong's Hang Seng (HSI) fell more than 4% in afternoon trading, while China's Shanghai Composite (SHCOMP) was less than 2% lower.
European stocks initially plunged, but managed to ease those losses somewhat as the session wore one. The FTSE 100 (UKX) tumbled 2.1%, Germany's DAX (DAX) lost 2.2% and France's CAC 40 (CAC40) 40 fell 1.3%.
French President Nicolas Sarkozy and German Chancellor Angela Merkel plan to discuss the "situation in the eurozone" Friday, according to the German government press office.
Heightening concerns in Europe, a monthly economic bulletin from Banco de Espana showed that the Spanish economy slowed down through the second quarter on its road to an already "moderate recovery." Gross domestic product grew 0.2% quarter-over-quarter, or 0.7% year-over-year.
Corporate earnings from two big European companies were also in play. Shares of Royal Bank of Scotland (RBS) fell more than 5% after the bank reported a wider-than-expected loss for the first half.
On a brighter note, Italy's largest phone company, Telecom Italia (TI), reported earnings and revenue that topped forecasts. Shares of the telecom company jumped 9%.
In the U.S., all three major indexes tumbled more than 4% Thursday, and erased all their gains for the year. The indexes have also pushed into "correction" territory -- defined as a 10% drop from recent highs. The Dow (INDU), Nasdaq (COMP) and S&P 500 (SPX) have all fallen 10% in just the last 10 days.
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On Friday, U.S. futures were lower again, signaling more potential weakness ahead of the bell. Investors are bracing for the monthly jobs report, which BlackRock's Doll said was adding to the selling pressure.
The report is now a bit of wild card, after it has come in far below forecasts for the last two months.
Economists surveyed by CNNMoney are expecting the report to show that the U.S. economy created 75,000 jobs in July, marking a slight improvement over the paltry 18,000 jobs added in June.
The unemployment rate is expected to hold steady at 9.2%.
Source CNN Money