Debt crisis fears have extended to the heart of the Eurozone. Thursday saw the plunging of European stocks by more than 3 percent and the sharp drop has prompted fears of another global recession.
The euro slid in value and markets reacted with alarm to the European Central Bank announcement that it would resume emergency credit-easing measures.
The main concern of investors seems to be that Italy and Spain might fall into the same debt trap that has engulfed more peripheral European nations such as Greece, Ireland, and Portugal.
Italy and Spain are the region's third and fourth largest economies and fears have emerged that the current eurozone rescue fund will not be able to cover bailouts of such large economies.
European Commission President, Jose Manuel Barroso warned that the sovereign debt crisis is spreading across Europe and has stated, "It is clear that we are no longer managing a crisis just in the euro-area periphery."
Barroso also said that markets "remain to be convinced that we are taking appropriate steps to resolve the crisis."
Barroso urged EU leaders to begin a "rapid assessment" of the bloc's rescue mechanisms.
Today also marked the worst market losses since the 2008 economic crisis. At the close of the bell Thursday, the Dow Jones Industrial Average (DJIA) had fallen about 512.61 points, or 4.31 percent, settling at 11,383.83.
The loss, which will likely be slightly higher once the final figures are reported, managed to erase all of the DJIA's gains for the current year.
Global fears over the weak U.S. economy have lead to a liquidation of big stocks and the market is currently being driven by fear.
With such heavy losses, the price of gold saw a rise to a new record high of 1,677 an ounce.