The Dow Jones industrial average was down more than 400 points at midday as pessimism about the global economy grew.

The Dow had dipped to 11,490, down 406 points, or 3.4%, at 11:25 a.m. Pacific time. Broader indexes were down more sharply, with the technology-heavy Nasdaq composite index plummeting 3.6%.

The Dow and the Standard & Poor's 500 index were both down more than 10% from their 2011 highs, putting them in "correction" territory.

Most stock markets in Europe ended the day down at least 3% after prices declined steadily during the day. Investors there are worried about increasing debt problems in Italy and Spain.

The drop in the U.S. came after a one-day respite Wednesday from nearly two weeks of declines.

Before trading opened on Wall Street, the Labor Department announced that the number of people applying for unemployment benefits last week fell slightly from the week before. But the report, following a raft of disappointing economic data in recent days, was taken by many gloomy investors to indicate only that the stalled job market was not improving.

Some investors also were selling to protect their portfolios before Friday's monthly announcement of unemployment data.

"It’s almost a very simplistic thing here, there has just been indiscriminate selling," said Michael Purves, chief strategist at BCG Financial. "Markets work in strange and mysterious ways –- and sometimes it takes awhile for routs like this to get going."

Investors have been moving into perceived safe havens such as gold, Treasury bonds and the Swiss and Japanese currencies. The value of the yen was down Thursday about 3% against the dollar after Japan's central bank moved overnight to sell yen to protect the country's export economy. Switzerland's central bank took a similar step Wednesday to limit the value of the Swiss franc.

Update: Stock markets plunge in worst day since depths of financial crisis

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-- Nathaniel Popper

Photo: The New York Stock Exchange. Credit: Justin Lane / European Pressphoto Agency