Stocks on both sides of the Atlantic slumped along with commodities, as disappointing data from China, the world's second-largest economy, sparked concern about the pace of global growth.
China's gross domestic product increased 7.7 per cent in the first quarter from a year earlier, according to the National Bureau of Statistics in Beijing. That's down from 7.9 per cent in the previous quarter and short of the 8 per cent expansion economists had predicted.
China's industrial output in March also failed to live up to expectations.
There were dicey signals for the world's largest economy too. The US Federal Reserve Bank of New York's general economic index fell more than expected to 3.1 in April, from 9.2 in March, while US homebuilder confidence unexpectedly dropped this month, the two latest in a string of recent reports indicating the American recovery is fragile.
In afternoon trading in New York, the Dow Jones Industrial Average dropped 1.21 per cent, the Standard & Poor's 500 Index sank 1.67 per cent, while the Nasdaq Composite Index slid 1.81 per cent.