NEW YORK, July 24, 2008 (AFP) - US and European stocks took a nosedive Thursday as troubling economic data on both sides of the Atlantic raised fresh concerns about sluggish growth and recovery.

Major European indexes tumbled, with the London FTSE down 1.61 percent, after weak data dented the economic outlook for the 15-nation eurozone, sparking fears of recession.

On Wall Street, losses intensified as the National Association of Realtors reported US home sales fell another 2.6 percent in June to a 10-year low as inventories rose and prices fell with buyers still hesitant in the face of a horrific market slump.

The seasonally adjusted annual rate of 4.86 million units is 15.5 percent lower than in June 2007.

The Dow Jones Industrial Average sank 283.19 points (2.43 percent) to 11,349.28 and the Nasdaq composite shed 45.77 points (1.97 percent) to 2,280.11.

The broad-market Standard & Poor's 500 index retreated 29.65 points (2.31 percent) to 1,252.54.

"Right now, we don't have enough data to argue that conditions (in the housing market) have bottomed," said Joel Naroff at Naroff Economic Advisors.

"And that is something that could cause equity investors to worry as the financial problems will not ease until housing has turned."

The housing crisis is at the heart of the current US economic woes. A rescue plan making its way through Congress is expected to be signed by President George W. Bush, who on Wednesday lifted his threat to veto the measure.

Record losses reported by Ford Motor Co., forced to step up its restructuring, also contributed to the negative tone in the US market.

The S&P banking index slid some 7.2 percent, leading the declines.

Among key financial groups, Citigroup slumped 9.7 percent to 19.06 dollars and Bank of America shed 2.8 percent to 30.64.

Among other key stocks, Ford skidded 15.5 percent to 5.11 dollars after reporting its worst quarterly loss ever at 8.7 billion dollars and new transformation efforts while warning that it does not see a US market recovery until 2010.

Dow Chemical fell 3.3 percent to 33.11 dollars as its earnings came up short of expectations.

Southwest Airlines fell 6.2 percent to 14.90 dollars as traders focused on the industry's woes from high fuel costs and shrugged off a better-than-expected profit report.

Bucking the trend, Amazon.com rallied 11.6 percent to 78.72 dollars after reporting a stronger-than-expected profit of 158 million dollars.

US bonds rose sharply. The yield on the 10-year US Treasury bond fell to 4.016 percent from 4.148 percent Wednesday while that on the 30-year bond eased to 4.611 percent against 4.700 percent. Bond yields and prices move in opposite directions.

Crude oil futures rebounded, gaining 1.05 dollars to close at 125.49 dollars a barrel in New York.

In Europe, shares also fell sharply after disappointing economic reports.

Eurozone business activity contracted more sharply than expected in July, hitting the lowest level since just after the September 11, 2001, terrorist attacks in the United States.

The eurozone's purchasing managers index (PMI), compiled by data and research group Markit, slid to 47.8 points in July from 49.3 in June, the lowest level since November 2001.

A separate survey in Germany, the eurozone's biggest economy, showed that business sentiment plunged unexpectedly to a 34-month low in July amid high oil prices and a strong euro which crimps exports.

The monthly business climate index calculated by Munich-based economic research institute Ifo fell below the psychologically key 100 level to 97.5 points, from 101.3 points in June.

"For a long time now, the German Ifo survey has presented a much more optimistic picture relative to other survey data -- in particular the PMIs -- and so this month's release finally represents some significant catch-up to the downside," said Barclays Capital analyst Nick Matthews.

The German data "bodes badly for the region as a whole," said Boris Schlossberg, analyst at Forex Capital Markets.

"Sentiment has turned sharply lower as the German economy has finally succumbed to the triple-punch combination of higher oil prices, higher interest rates and higher exchange rates," Schlossberg said.

The Frankfurt DAX index fell 1.46 percent and France's CAC 40 skidded 1.38 percent.

In Asia, stocks mostly gained Thursday on lower oil prices and official moves to shore up the US housing market, with Japan rising more than two percent despite the first fall in its exports for years.