LONDON — As Europe works to douse its government-debt crisis, the flames just keep spreading, with the euro and U.S. stocks sinking Thursday along with confidence that politicians and central bankers can act fast enough to save the continent from an economic tailspin.
Those fears sparked extreme turbulence on Wall Street, as the Dow Jones industrial average finished down 347 points after a precipitous dive. There were reports a trading error hastened the selling.
Down almost 9 percent at one point, the Dow recovered to end off 3.2 percent. European stock markets had already closed by the time of New York’s violent drop, ending with more modest losses.
Britain’s FTSE 100 index fell 1.5 percent, while Germany’s DAX ended down 0.8 percent. The CAC-40 in France was off 2.2 percent.
U.S. markets fell even after Greek lawmakers approved austerity cuts needed to secure $140 billion in international rescue loans.
The euro sagged 1.7 percent to $1.2607 after ratings agency Moody’s warned that banks in Portugal, Italy, Spain, Ireland and Britain could be hurt by the debt crisis, and after European Central Bank president Jean-Claude Trichet offered no new measures against the debt troubles. The euro was as high as $1.51 late last year.
