European markets tumble

European indices closed with large losses on Wednesday, led by a nosedive on Greece's main stock index, which plunged 6.3 percent to a 14-month low. Prior to a late afternoon rally in Athens, the numbers had briefly appeared even worse.

Yields on 10-year Greek government bonds also rose sharply, up 1.1 percentage points to 7.73 percent on Wednesday, suggesting renewed doubts about the eurozone's solvency.

This followed the start of a European Court of Justice case examining whether it's permissible for the European Central Bank to buy up state debt from eurozone countries. This measure, not yet used by the ECB despite being announced as a possibility in 2012, is seen as the last line of defense against a government default.

Greece's government had also voiced its intention for an early exit from European emergency loans programs, more commonly called "bailouts."

"The rising government borrowing costs should be a wake-up call to the Greek government not to tempt the markets with an early bailout exit," economist Megan Greene from Manulife Asset Management told the Associated Press.

By contrast to Greece's 7.73 percent interest on government bonds, the returns demanded by investors on German government debt on Wednesday dropped from 0.71 percent to 0.67 percent.

DAX down, US markets start slowly

Germany's DAX in Frankfurt slid 2.87 percent, to 8,572.15 points - a far cry from its 2014 peak of more than 10,000 points in June and July. Steel giant ThyssenKrupp, shedding almost 5 percent, was the leading loser.

London's benchmark FTSE 100 index slid to its lowest level since June 2013, dropping 2.83 percent on the day; the CAC 40 in Paris sank 3.63 percent, dipping below the symbolic 4,000-point mark for the first time since 2013. Madrid's main index dropped by more than 3.5 percent, Milan's by almost 4.5 percent.

The European benchmark index FTSEurofirst 300 closed 3.2-percent lower, its largest single-day drop since late 2011.

With trading ongoing in the US, which on Wednesday logged reductions in retail sales for September, the major indices were also in negative territory. The Dow Jones slumped back below 16,000 points - a record high it reached for the first time this year - down almost exactly 2 percent in early-afternoon trading. The Nasdaq shed just over 2 percent in the same time period.

Slow growth, low inflation, falling oil prices, the possible spread of Ebola, continued tension with Russia, and around a year of broadly bullish trading have all helped to contribute to the recent decline on western markets.

msh/jr (AFP, AP, dpa, Retuers)