European shares have opened sharply lower following dramatic falls in Asia that saw Tokyo's Nikkei index fall 11%.
Global falls have largely wiped out the gains earlier in the week, as fears of recession cancelled out any optimism from the banking rescue package.
London's FTSE 100 opened 5% lower while the Cac 40 in Paris was down 6%.
On Wednesday, New York's Dow Jones index saw its worst one-day percentage fall on Wednesday since October 1987, closing almost 8% down
Shares in Hong Kong shed 7.6%. Australian, South Korea and Indian indexes all fell by at least 4%.
The prospect of a protracted economic downturn also sent crude oil prices lower to hit a 13-month low just above $73 a barrel
Stocks had risen earlier in the week after governments acted to aid banks, but these gains have mostly been lost.
Investors fear that efforts to stem the banking crisis will not be enough to prevent a recession.
Ben Bernanke, the chairman of the Federal Reserve, warned that the US economy now faced a "significant threat" from the credit crisis.
'Real economy' impact
Signs of optimism seen earlier this week when markets recovered some of the lost ground have been all but wiped out.
In Tokyo, the Nikkei 225 index closed 11.4% lower, or 1,089.02 points, at 8,458.45. In Hong Kong, the Hang Seng index fell 7.6% to 14,785.60 points.
Australia's main share index ended down 6.7% and India's main index was down 4%.
There's a certain degree of panic selling in Tokyo but the sentiment's different from last week," Takashi Ushio, head of the investment strategy division at Marusan Securities, was quoted as saying by Reuters news agency.
"Last week people were panicking over the financial system, nobody really knew what would happen. But now it's the real economy."
Yutaka Miura, senior strategist at Shinko Securities Co Ltd, said investors were particularly unnerved by a 1.2% fall in the value of US retail sales between August and September.
"It really confirmed a severe slowdown in the US economy," he told the Associated Press news agency.
BBC business editor Robert Peston said that despite recent actions by central banks to help the banking sector, banks were still not lending to each other at anything like a normal rate of interest relative to official rates.
This was worrying as it meant banks were unlikely to lend money at better rates to consumers and businesses.
No quick turnaround
Many investors are now convinced that the US economy, if not already in a recession, is moving towards one.
A Federal Reserve report showed economic activity had weakened across the country.
In a speech in New York, Mr Bernanke said the US had avoided making the mistakes that helped plunge the country into the 1930s Great Depression.
He pledged that the Fed would continue to fight the credit crisis. But he warned it would take time for the country's economic health to mend.
"The turmoil in financial markets and the funding pressures on financial firms pose a significant threat to economic growth," he said.
"The last decade has shown that bursting bubbles can be an extraordinarily dangerous and costly phenomenon for the US economy."
The leaders of the G8 major industrialised nations agreed on Wednesday to hold a summit with other states to discuss global financial reform.
In Brussels, EU leaders rallied behind a plan to aid the bloc's banking sector.
recession 後退;退回 (經濟的)衰退;衰退期
cancelled out 抵消
shed 流出;流下 擺脫,去除
crude 天然的,生的,未經加工的 粗野的,沒教養的 粗糙的,粗陋的
significant 有意義的;意義(或意味)深長的 重要的,重大的;值得注意的
panic 恐慌,驚慌 (經濟)大恐慌
sentiment 感情,心情;情操 意見,觀點
pledged 保證給予;許諾;發誓 用...抵押,以...典押