US Stocks: Worst day since 2008 financial crisis

NEW YORK (CNNMoney) -- Stocks plunged Thursday in their single worst day since the 2008 financial crisis.

The Dow tumbled 512 points -- its ninth deepest point drop ever -- as fear about the global economy spooked investors.

"The conventional wisdom on Wall Street was that the economy was growing -- that the worst was behind us," said Peter Schiff, president of Euro Pacific Capital. "Now what people are realizing is the stimulus didn't work, and we may be headed back to recession."

U.S. markets were already sharply lower on widespread worries, including the weak job market. But the selling gained momentum as Japanese and European policymakers stepped in with dramatic measures to shore up their financial markets.

There's "total fear" in the market, said Bob Doll, chief equity strategist at the world's largest money manager, BlackRock.

All three major indexes tumbled more than 4% Thursday and erased all their gains for the year. The indexes have also pushed into "correction" territory -- defined as a 10% drop from recent highs. The Dow, Nasdaq and S&P 500 have all fallen 10% in just the last 10 days.

"In the last two weeks, we've been through the ringer," said Rich Ilczyszyn, market strategist with futures broker Lind-Waldock. "When we start looking at the recovery, there's nothing to hang our hats on anymore."

At the closing bell, the Dow Jones industrial average (INDU) was down 512 points, or 4.3%. The S&P 500 (SPX) was down a staggering 60 points, or 4.8%. The Nasdaq (COMP) lost 136 points, or 5.1%.

Fears about a global slowdown are at the forefront of investors' minds amid recent weak economic data. Early Thursday, the latest reading on jobless claims showed a large number of Americans remain unemployed.

Adding further to investors' jitters, Wall Street is waiting for Friday's jobs report, which BlackRock's Doll said was adding to the selling pressure.

The report is now a bit of wild card after it has come in far below forecasts for the last two months.

Economists surveyed by CNNMoney are expecting the report to show that the U.S. economy created 75,000 jobs in July, marking a slight improvement over the paltry 18,000 jobs added in June.

The unemployment rate is expected to hold steady at 9.2%.

Meanwhile, it should come as no surprise that in the U.S., investors flocked to assets perceived as low-risk, including Treasuries and gold.

Treasury prices rose, pushing the yield on the 10-year note down to 2.43% from 2.6% late Wednesday, and gold futures for December delivery fell $7.30 to $1,659 an ounce. Earlier in the session, gold hit a record high of $1,684.70 an ounce.

In other commodities, oil prices slumped 5.3% to $86.63 a barrel.