Dow sees biggest drop in seven months and falls below 12,000. European stocks drop to lowest level of the year.
US stocks tumbled at midday after reports about a trade deficit in China and weak jobless claims in the US.
General Motors has reported a $2 billion profit for the third quarter, and next week, the company plans an initial public offering on the New York Stock Exchange.
GM CEO Ed Whitacre said that he will step down on Sept. 1, with GM board member Daniel Akerson taking his place.
General Motors reported a relatively small loss for the second half of 2009 – $4.3 billion. Next steps include repaying Treasury loans by June and eventually returning to shareholder ownership.