LONDON - European and U.S. stock markets fell Friday after data showing American consumers are still holding off on spending underscored the fragility of a recovery in the world's largest economy.

Germany's DAX closed down 3.1 percent to 5,414.96, Britain's FTSE 100 shed 1.8 percent at 5,044.55 and France's CAC 40 slid 2.9 percent to 3,607.69.

In early afternoon trading in New York, the Dow Jones industrial average was 2.0 percent lower at 9,768.28 and the Standard & Poor's 500 index lost 2.2 percent at 1,043.20.

U.S. consumer spending plunged in September by the largest amount in nine months, reflecting the end of the government's "Cash for Clunkers" car rebate program. Incomes, the fuel for future spending, were flat.

Markets had made strong gains Thursday after the U.S. government reported that the economy grew by 3.5 percent in the July-September period, signaling the end of the worst recession in seven decades. But the weakness in spending and incomes as the quarter ended tempered enthusiasm Friday.

"It seems that while the U.S. economy may be exiting the recession, investors would be wise to take heed of President Obama's comments yesterday that the U.S. has a 'long way to go' before a full recovery is seen in the market place," said Philip Gillett, sales trader at IG Index.

The strength of consumers is considered vital to a recovery because their spending accounts for more than two-thirds of all U.S. economic activity. Without government incentives and stimulus programs, it is widely expected consumer spending will have to rise significantly to extend the economic recovery.

Meanwhile, retail sales fell 0.5 percent during September in Europe's largest economy, Germany's Federal Statistical Office reported.

Earlier, Asian stock markets snapped three days of losses following Thursday's report that U.S. gross domestic product rose in the third quarter, spurring hopes of improved demand for the region's exports. Major benchmarks from Tokyo to Sydney gained 1.5 percent while a few markets failed to hold their gains and ended slightly down.

On Wall Street, Thursday's GDP data reinvigorated investors who had dumped stocks for much of the week on signs of a slowing U.S. housing market and weak consumer confidence.

The Dow Jones industrial average had its best day since July 15, rising 199.89 points, or 2.1 percent, to 9,962.58, although that gain was wiped out Friday.

"From the mid to end of this week we have almost jumped back to 12 months ago when we had this intense volatility in the markets," said James Hughes, market analyst at CMC Markets.

In Europe on Friday, oil and mining companies struggled as commodity prices edged lower.