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LONDON, England (CNN) -- Concerns over a weak housing market in the United States, coupled with worries about growth in the world's biggest economy, have rekindled another global sell-off of stocks.
Nervous investors jumped out of the market for the second time in two weeks, sending major indexes tumbling by between 2 and 3 percent.
European shares closed at their lowest level in 3-1/2 months on Wednesday, with the FTSEurofirst 300 index of top shares 2.6 percent lower at 1,427.4 points -- its lowest closing level since Dec. 1, 2006, bringing to 4 percent its overall decline since the start of the year. (Full story)
"This seems to be the second leg of the global fall in equities and there is very little impetus to jump in and buy," one trader told Reuters. "It's time to fasten seat belts."
On Wall Street, where the share decline began, stocks were trimming losses in Wednesday afternoon trading following a volatile morning. (CNNMoney.com)
But a day earlier, the Dow Jones industrial average and the broader S&P 500 index both lost about 2 percent.
The tech-heavy Nasdaq composite sank more than 2 percent and the Russell 2000 small-capitalization index plunged 2.5 percent.
Tuesday's weak U.S. retail sales report -- the latest in a string of sluggish economic data -- revived fears about the economy slowing abruptly, and possibly falling into recession, Barry Hyman, equity strategist at EKN Financial services, told CNNMoney.
Defaults among U.S. borrowers with poor credit have swelled, also raising concerns about a wider impact on the economy.
The wave of selling continued in Asia, with Japanese stocks down more than 3 percent on Wednesday. (Watch how bad loans in U.S. affected global markets )
Other regional stock markets dropped between 1.5 percent and 3 percent, with shares in exporters hammered by a surging yen and worries that a crisis in U.S. mortgage lending will have a negative impact on the U.S. economy, the biggest market for the region's exports. (Full story)