The price of oil and other raw materials also fell sharply

The stock market plunged by more than 4 percent yesterday in its worst day in more than two years and investors flooded safe-haven investment alternatives, fearing that global economy may stumble into a new recession.

European markets have continued the steep share sell-off, with investors worried about both the eurozone debt crisis and the weak US economy.

The benchmark Dow Jones industrial average fell 512.76 points to close at 11,383.68. Another key marker, the Wilshire 5000 Total Market index, the broadest measure of US stocks, lost $800 billion in value - its worst single-day performance since January 2009.

US shares have fallen for nine of the past 10 days - and lost 6.4% in the past week.

In volatile trade, the UK's benchmark FTSE 100 index and Germany's Dax index were both down by about 2.5%. In London, banking shares saw heavy falls, with Royal Bank of Scotland down 8%, and Lloyds Banking Group 3% lower.

The gap between German bonds - the safest in Europe - and Spanish and Italian debt again reached a record since the euro was introduced in 1999.

The price of oil and other raw materials also fell sharply yesterday. Oil was down 3.8 percent, to $88.44 a barrel, its lowest price in nearly six months. And an index that tracks the prices of 24 different commodities showed each one losing value yesterday.

And there are continuing signs of a global economic slowdown popping up around the world; concerns over the European debt crisis have spread to include Italy in the collection of countries that may have trouble paying their bills.

Source: Boston, The Telegraph, BBC