Markets in Asia and Europe took their cues from the performance of U.S. markets Wednesday, when Wall Street gave up its euphoria over a central bank plan to bail out the credit markets. The Dow Jones industrial closed with a moderate loss following its 416-point gain on Tuesday, but the decline was clearly a signal from U.S. investors was that they were no longer so sure the Federal Reserve plan to pump $200 billion into credit markets would fix the many problems in the U.S. economy.

Meanwhile Thursday, the dollar hit a 12-year low against the Japanese yen and also fell to another new low against the euro, which reached $1.56 for the first time. And oil prices, whose relentless ascent have fed inflation worries, remained at the $109 level but were expected to extend their own run into record territory.

That all sent global stocks reeling. In Japan, the Nikkei 225 index tumbled 3.3 percent Thursday to its lowest in 2 1/2 years. Markets in Europe were all down more than 1 percent.

Ahead of the opening in the U.S., Dow futures were down 159 points, or 1.3 percent, at 11,965, while Standard & Poor's 500 futures were down 19.60, or 1.5 percent, at 1,289.80 and Nasdaq 100 futures fell 24.2, or 1.4 percent, to 1,710.5.