Nikkei index down more than 10 percent

TOKYO _ Japan's key stock index plummeted more than 10 percent at one point in early trade Thursday, hit by another dive on Wall Street and growing recession fears.

The benchmark Nikkei 225 stock average nose-dived 911.91 points, or 9.55 percent, to close at 8,635.56 in the morning session. At one point, the index dropped 10.34 percent in early trade.

The heavy selling in Tokyo comes after the Dow Jones industrial average plunged 7.8 percent Wednesday as jittery investors dumped shares on sobering reports on the U.S. economy.

"The massive sell-off on Wall Street triggered another selling in Tokyo," said Kazuki Miyazawa, market analyst at Daiwa Securities SMBC Co. Ltd. "But what really depressed the U.S. and Japanese markets is growing fears of a global recession."

Recession fears intensified as the U.S. Commerce Department report showed U.S. retail sales fell 1.2 percent in September -- almost double the 0.7 percent decline analysts expected.

The figure was yet another grim indicator showing a slowdown in the world's largest economy as consumer spending alone accounts for more than two-thirds of U.S. economic activity.

Yutaka Miura, senior strategist at Shinko Securities Co. Ltd., said investors were particularly unnerved by the worse-than-expected U.S. retail data.

"The 1.2-percent fall was a shock to investors. It really confirmed a severe slowdown in the U.S. economy," Miura said.

The massive selling in New York, which pushed the Dow down 733.08, or 7.87 percent, its second-largest point loss ever, also accelerated as the U.S. Federal Reserve Chairman Ben Bernanke warned in a speech Wednesday that patching up the credit markets won't provide an instantaneous jolt to the economy.

Japan's broader Topix index lost more than 7 percent to close at 883.21 in the morning trade Thursday.

Export-linked shares were hit hard in Tokyo on growing worries over a prolonged slump in the U.S. economy, a key export market for Japan.

Japan's top automaker Toyota Motor Corp. lost 6 percent to 3,430 yen, while Sony Corp. dropped 9.6 percent to 2,410 yen.

Banking giant Mizuho Financial Group Inc. plunged 11.45 percent to 348,000 yen.