Britain's benchmark FTSE 100 fell 0.94 percent, while France's CAC 40 slid 0.73 percent and Germany's DAX dropped 1.041 percent after declines in Tokyo and other Asian markets.

"The fact that the FTSE closed Friday's session virtually unchanged may have left some thinking that the recent slide in equity markets may be at an end, but triple-digit losses on the Dow ahead of the weekend break have taken their toll on Asian markets," said Matt Buckland, a trader at CMC Markets.

Also sparking jitters was the yen's jump to a three-month high against the dollar as investors reversed so-called yen-carry trades. A decline in this trading practice, which involves borrowing money at Japan's ultra-low interest rates to invest in higher-yielding assets elsewhere, could hurt global liquidity.

U.S. markets fluctuated as investors tried to size up where the market was headed. The Dow Jones industrial average traded in a 150-point range before closing near its session lows, falling 63.69, or 0.53 percent, to 12,050.41.

Major Latin American markets all extended their recent downturn. In Brazil, Sao Paulo's Bovespa index finished down 2.8 percent, Mexico City's IPC index shed 2.0 percent and the IPSA index in Santiago, Chile ended 1.1 percent lower. In Buenos Aires, Argentina, the benchmark Merval index gave back 3.0 percent.

Tokyo's Nikkei 225 index fell for a fifth day, tumbling 575.68 points, or 3.34 percent, to 16,642.25 points, dragged down by major exporters such as Canon Inc., Sony Corp. and Toyota Motor Corp., whose earnings are eroded by a stronger yen. Since reaching a nearly seven-year high last Monday, the Nikkei index has slid 8.64 percent.

Markets in Hong Kong, Australia, the Philippines, Malaysia, India and South Korea all fell sharply today, continuing their declines from last week, when a 9 percent plunge in Chinese stocks on Tuesday triggered cascading selloffs on Wall Street and other global markets.

"I don't know where the domino effect will stop," said Jose Vistan, research director at AB Capital Securities in Manila, Philippines, where the benchmark index sank 4.5 percent. "Emotions are the ones driving share prices right now."

"Everything takes a back seat relative to the selloff that we are seeing. It's emotions," Vistan said. "You throw away technicals and fundamentals out the window. Emotions are the ones driving share prices right now."

Hong Kong's Hang Seng index tumbled 4 percent to its lowest level since mid-December. Australia's stock market — which had hit records last month — fell for a fifth day, sinking 2.3 percent. South Korea's benchmark index dropped 2.7 percent and Indian stocks fell 4.2 percent.

Investors still seemed risk-averse after the previous week's turmoil.

"When there's such a big market move in such a short period of time, there's that element of surprise and confusion," said Teruhisa Ishikawa, section chief for investors information at Mizuho Investors Securities Co.

Funds and institutional investors tend to go on a selling binge to trim losses in reaction to such market moves, he said.

In China, the Shanghai Composite index fell a more modest 1.6 percent, but foreign-currency denominated "B shares" tumbled after officials denied rumors those stocks might be merged with the mainstream Chinese-currency "A shares."

Many analysts see the market selloff as a healthy correction for markets that had risen too far, too fast. China's market had doubled in value last year, for example. In Malaysia, stocks had surged 17 percent since the start of the year before last week's selloff.

There were also signs that the recent turmoil had caused some international investors to unwind yen-carry trades. As the yen appreciates, the profits from these trades are eroded, prompting some investors to return yen loans, strengthening the Japanese currency.

Still, while the Bank of Japan raised interest rates last month to 0.5 percent, they are still far lower than rates in the U.S. or Europe, making the yen-carry trade still an attractive strategy, analysts said.