It was a grim Thursday on the Toronto stock market as the major index dropped by more than 3 percent on Thursday to the lowest level since 2010.

U.S. stocks also were pummeled with the Dow Jones Industrial Average seeing its worst two-day decline in three years as international policymakers seem incapable of averting another worldwide recession.

At the same time, commodities fell due to the spate of negative news.

In New York, the Standard & Poor's 500 Index fell by 3.2 percent to 1,129.72, according to preliminary closing data. All 10 industries belonging to the S&P 500 moved back at least 1.7 percent as losses were led by commodity and industrial shares. Meanwhile, the Dow Jones Industrial Average finished the day down to 391.01 points, or 3.51 per cent, at 10,733.83. The Nasdaq Composite declined by 82.52 points, or 3.25 percent, to 2455.67.

The Toronto stock exchange's S&P/TSX composite index closed 392.5 points down or 3.28 percent at 11,562.51. Earlier in the day, it stood at a trough of 11,420.35, its weakest point since the middle of last year.

Barry Schwartz, vice president at Baskin Financial Services was almost certain of another slump towards the fourth quarter.

"Stocks and various sectors are trading as if recession is practically sure," he said in a Reuters report.

The Sydney Morning Herald said the selloff was extensive with 80 percent of the index's main industries finishing lower.

Shareholders are not convinced that global leaders will be able to manage a looming Greek default and the spiralling debt crisis in the euro zone.

The confidence of U.S. consumers also has been rattled by the latest round of stock market upheavals, according to the Bloomberg Consumer Comfort index.