Wall Street closed more than 3 percent down after a day which saw US stocks nose dive by as much as 9 percent at one point.
It was the largest percentage drop since April 2009, with the Dow Jones, Standard & Poor’s and the Nasdaq all losing more than 3 percent.
Concern about contagion from Greece’s debt problems was the main reason. Investors were disappointed when the European Central Bank – while giving verbal support for Greece’s savings plan – stopped short of offering to buy government bonds.
Meanwhile on the currency market the euro slumped to its lowest level against the dollar since March last year.