U.S. Treasury debt prices rose Thursday as recession fears cued investors to flee riskier assets like stocks and seek safety in U.S. government debt.

Major U.S. stock indexes were down around 2 percent, and each fell more than 3 percent at one point.

The U.S. bond market has not seen as sharp a week-long drop in yields since the height of the global financial crisis.

Yields, which move in the opposite direction of prices, briefly fell below 3.75 percent on 30-year Treasury bonds and below 2.5 percent 10-year notes.

"The economy has hit an air pocket," said Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi UFJ in New York. "With yields likely to stay low for a very long time, there is a rush to buy out further on the curve by yield starved investors."

European Central Bank President Jean-Claude Trichet (ECB), speaking to Reuters Insider after the bank's monthly meeting, said growth was "slowing down" at the global level.

Worries about sluggish global growth and Italy's debt woes sent European stocks tumbling with the key FTSEurofirst 300 index of top European shares falling 3.33 percent to below the 1,000 mark for the first time in 12 months.

The European Central Bank's (ECB) Governing Council called risks to the euro area's economic outlook "broadly balanced."

News that new U.S. jobless claims eased 1,000 to 400,000 last week had no discernible impact. Americans receiving extended emergency jobless benefits fell by 42,042 to 3.72 million.

"People are falling off these ranks," said David Ader, head of government bond strategy at CRT Capital Group.

Bond prices have rallied and yields have sunk as investors sharply temper views of the economy's first-half growth and cut expectations for the second half.

Worries over evidence the economic recovery has lost traction were fueled late last week by government data showing anemic U.S. growth in the first half of the year.

Investors also considered the idea the Federal Reserve may begin another Treasurys purchase program to aid growth.

The weekly jobless claims figures were the last economic report before Friday's Labor Department July employment data.

Economists polled by Reuters estimated that Friday's report will show that private payrolls added 115,000 jobs in July and total nonfarm payrolls expanded by 85,000 jobs.