Stock markets across the world continued their slide Friday as fears heightened that the global economy was headed to a new downturn.

Asian stock markets dropped sharply, following Thursday's steep sell-off in the United States. Later, European and U.S. markets also fell, although not as sharply as the day before.

U.S. markets whipsawed in volatile trading, first rising after a government report showed the nation's unemployment rate declined slightly last month, but then falling. The widely watched Dow Jones Industrial Average of 30 key stocks fell by more than a half percent in midday trading and indexes covering a broader range of securities dropped by more than that.

The U.S. economy has largely stagnated this year, adding to the worries for investors already deeply concerned about the spreading debt contagion for European governments. The U.S. report said the economy added 117,000 new jobs last month, more than expected, but still below the figure required for sustained economic growth.

On Friday, Tokyo's Nikkei index closed down 3.72 percent, to its lowest level in five months, and Hong Kong's Hang Seng plunged more than 4 percent.

Stock indexes in both London and Frankfurt dropped by more than 2.7 percent. The Paris exchange fell 1.3 percent.

In the United States on Thursday, the Dow index suffered its biggest drop since October 2008, plummeting 513 points, or 4.3 percent. Other major stock indexes, the NASDAQ and the S&P 500, also fell sharply. Financial analysts say investors are concerned the U.S. economy could be headed back into a recession, which would be its second in three years.

The U.S. is the world's largest economy, but investors have voiced little confidence in the country's sluggish recovery, even with the agreement this week by U.S. President Barack Obama and Congress to increase the nation's borrowing limit and avoid an unprecedented default on the government's financial obligations.