Stock markets continued to fall across the globe on Friday, as investors showed new concern about the struggling U.S. economy and the stability of the European banking system.
Asian stock indexes dropped sharply, European exchanges followed suit and U.S. stock indexes retreated in early trading in New York.
Analysts said that fear had overtaken stock trading, with many investors worried that officials in Europe and the U.S. will not be able to solve vexing economic and government financing issues.
In Europe, the fear is that banks are not strong enough to handle the continent's debt contagion sweeping through its financially troubled governments. Investors are also worried that U.S. politicians will not be able to reach agreement on long-term spending cuts to trim the country's burgeoning debt, or boost the economy enough to cut the nation's unemployment rolls.
With the global stock sell-off, more than $6 trillion has been erased from investors' portfolios this month alone.
As they abandon stocks, many investors have been buying gold, briefly pushing the price of the precious metal to a new high Friday above $1,880 an ounce. Its value is up 31 percent this year. Investors have also looked to the Swiss franc as a safe haven from the volatility of stock ownership, and its value has risen recently against the value of 16 other major currencies.
Japan's Nikkei index lost just over two-and-a-half percent at the closing bell, while the Kospi index in Seoul plunged over six percent by the end of its trading session. Indexes in Hong Kong, Sydney, Singapore and Taiwan all closed more than three percent below Thursday's close.
Europe's main indexes lost one percent or more by mid-afternoon trading Friday.
The sell-off in Asia and Europe continues Thursday's huge losses on Wall Street. The benchmark Dow Jones, S&P 500 and the Nasdaq indexes all declined between four and five percent.
Oil prices are also retreating because investors expect lower economic growth will cut the demand and price for energy. Oil prices for September delivery dropped to below $80 a barrel on the New York Mercantile Exchange, while Brent crude for October fell to $106 a barrel.
