Major U.S. and European stock indexes fell sharply Tuesday as weak economic reports from the United States and Asia raised concerns that the global recovery may falter.
New York's Dow Jones Industrial Average closed down about 2.7 percent, while key indexes in London, Paris and Frankfurt closed three to four percent lower.
Analysts say one factor behind the sell-off is a report issued Tuesday showing U.S. consumer confidence tumbled in June after three months of gains. The Conference Board, a U.S. business research group, said its confidence index fell to 52.9 from 62.7 in May.
Most economists had expected the index to remain steady at 62.
Analysts say investor sentiment also weakened due to data showing Japan's economic recovery has slowed, and China's recent growth was not as fast as originally thought.
U.S. President Barack Obama said Tuesday the U.S. economy is in a "strengthening" phase led by manufacturing, but he acknowledged "great concern" among Americans about millions of jobs lost in the past two years.
Speaking after talks with Federal Reserve Chairman Ben Bernanke at the White House, Mr. Obama said his administration still has a lot of work to do to boost economic growth and create jobs.
Major Asian stock markets posted big losses Tuesday, with Tokyo and Hong Kong losing one to two percent.
Analysts also blamed the sell-off on investors' concerns about the ability of global banks to repay $546 billion in loans to the European Central Bank due this week.
Mr. Obama said he sees "skittishness and nervousness" in the financial markets because of debt troubles in Europe and said the United States will have to "work through" that issue.
Senior United Nations economic officials called for major reforms to the world's financial system in a report Tuesday, saying the crisis that erupted in 2008 has exposed serious weaknesses in that system.
One proposal they raised is a new global currency reserve system to reduce the reliance of many nations on the dollar, which they said has proved to be an unstable store of value. They recommended adoption of an alternative to the dollar known as special drawing rights, or SDRs.
The International Monetary Fund uses SDRs as an accounting unit that nations can exchange for certain IMF operations and transactions. SDRs also can be sold for dollars, euros or other currencies.
Some information for this report was provided by AP.