Stocks slid Friday after figures showed the U.S. generated far fewer jobs than anticipated in May _ another sign that recovery in the world's largest economy is slowing down.
The Labor Department reported that only 54,000 jobs were created during the month and that the unemployment rate rose 0.1 percentage points to 9.1 percent. The number of jobs created was far lower than the 165,000 expected in the markets and represents the weakest jobs creation since last September.
Analysts said the figures have provided further compelling evidence to the notion that the U.S. economic recovery is running out of steam.
"The employment data have confirmed the markets' worst fears about a marked slowdown in U.S. economic activity, to the extent that any one report can be relied upon," said Alan Ruskin, an analyst at Deutsche Bank.
Following the release of the figures, European markets gave up all their gains and sank deep into negative territory while already-downbeat predictions for the U.S. open were scaled back even further.
In Europe, the FTSE 100 index of leading British shares was down 0.6 percent at 5,811 while Germany's DAX fell 0.5 percent to 7,035. The CAC-40 in France was 1.1 percent lower at 3,847.
Wall Street was poised for sharp losses at the open too _ Dow futures were down 1.2 percent at 12,088 while the broader Standard & Poor's 500 fell 1.3 percent at 1,295.
In the currency markets, the dollar fell sharply, particularly against the yen, following the figures' release.
By mid afternoon London time, the euro was 0.1 percent higher at $1.4490 while the dollar was 0.9 percent lower at 80.13 yen.
Investors, particularly in currency and bond markets, are also waiting for a key assessment of Greece's economic position later and whether the country gets more time to get a handle on its debts, even though it's finding it difficult to meet the commitments it made last year in return for a euro110 billion ($159.1 billion) bailout package from its partners in the EU and the International Monetary Fund.
"All the financial markets are concerned with for now is having this issue pushed further into the future," said Derek Halpenny, European head of global currency research at The Bank of Tokyo-Mitsubishi UFJ.
The EU, the European Central Bank and the IMF _ collectively known as the troika _ are wrapping up a review of Greece's implementation of economic reforms and a statement is due later. That will be crucial toward determining whether Greece will receive a fifth tranche, worth euro12 billion, of bailout loans agreed last year.
Greece has so far received euro53 billion from its rescue deal in May 2010.
Earlier in Asia, there were few positive signals in the run-up to the jobs data.
Japan's Nikkei 225 index closed down 0.7 percent at 9,492.21, while South Korea's Kospi fell 0.7 percent to 2,113.47. Hong Kong's Hang Seng tumbled 1.3 percent to finish at 22,949.56.
Mainland Chinese shares advanced, however, as investors snapped up bargains following recent selloffs.
The Shanghai Composite Index gained 0.8 percent to 2,728.02, while the Shenzhen Composite Index rose 1.7 percent to 1,124.32.
In the oil markets, a barrel of crude continued to hover around the $100 mark. Benchmark oil for July delivery fell 71 cents to $99.69 a barrel in electronic trading on the New York Mercantile Exchange.
Pamela Sampson in Bangkok contributed to this report.