LOS ANGELES – Hopes that world financial markets had bottomed were dashed Wednesday as worries over Europe’s debt crisis infected France and investors focused on a fading outlook for the U.S. economy.

European stock markets plummeted to new two-year lows Wednesday, and sellers swarmed again on Wall Street after a sharp rebound a day earlier. The Dow Jones industrial average sank 519 points, or 4.6 percent, to its lowest level since September, capping another session of extreme swings.

President Obama and Treasury Secretary Timothy Geithner met with Federal Reserve Chairman Ben Bernanke to discuss “the outlook for the recovery” and other issues, the White House said. The meeting came one day after the central bank issued a bleak forecast for the economy.

“This is a panic over a lack of growth and a lack of faith in policymakers in Washington and in Europe,” said Brian Barish, who heads Denver money manager Cambiar Investors.

Although the U.S. market has suffered periodic setbacks in the past two years as stocks have rallied from their recession lows, many analysts say this decline is different in more than just the severity of losses. Just as during the financial crisis of late 2008, there is no longer a feeling that “buying the dips” will be rewarded.

As investors balk, a deeper decline can become self-fulfilling.

“There is no rush to jump in,” said Dan McMahon, a stock trader at Raymond James & Associates in New York. “There’s no sense that you’re going to miss it if you’re patient.”

Instead, money continues to pour into the classic havens of U.S. Treasury bonds and gold.

Nerves were frazzled again Wednesday as fears rose that France would be the latest domino to fall in Europe’s deepening debt crisis.

Rumors began to circulate that the French government’s AAA credit rating might be the next to be cut, following the U.S. downgrade by Standard & Poor’s last weekend.

S&P and two other major rating firms said France’s rating was intact. Yet stocks of France’s biggest banks plunged on worries about potential losses on their holdings of French bonds and other eurozone government bonds.

French President Nicolas Sarkozy interrupted a French Riviera vacation to convene an emergency meeting in Paris with his ministers to discuss the crisis. He reaffirmed his pledge to slash France’s debt and trim budgets, saying in a statement “that the promise to reduce the public deficit is untouchable and will be kept whatever happens to the economic situation.”

Investors also are concerned that France and Germany are facing mounting pressure to increase their bailout assistance to debt-laden eurozone partners. The 17-nation eurozone has already approved bailouts of Greece, Ireland and Portugal, and some experts are calling for a tripling of the current $625 billion rescue fund to help avert possible problems in Italy and Spain.

“If big countries like France and Germany keep taking over the risk of neighboring countries, then they won’t be seen as safe,” said Kai Carstensen, economics analyst at the Institute for Economic Research in Munich. “That’s the problem with these bailouts. The risks are getting too large even for Germany. Heads of state have to take that into account before talking about bailing out even more.”

Though U.S. stocks have fallen hard in the past few weeks, the losses still are relatively modest compared with what has happened in Europe.

France’s main market index dived 5.4 percent on Wednesday and now is down nearly 28 percent from its 2011 high. The Spanish market also has fallen 28 percent from its peak, while Italian stocks have crashed 37 percent, including a drop of 6.6 percent on Wednesday.

By contrast, the Dow index, at 10,719, is down 16 percent from its 2011 high reached in April, though broader U.S. indexes have fallen more sharply.

If Wall Street’s wild swings continue, they’re likely to push more frightened investors to the sidelines.

The Dow fell 634 points on Monday after the S&P downgrade of the United States over the weekend, then soared 429 points Tuesday after the Fed signaled that it would try to counter the economy’s weakness by keeping short-term interest rates near zero for at least two more years.

The rebound was fleeting, however, as the market focused on the Fed’s downbeat assessment of growth prospects — which could soon undercut analysts’ still-optimistic expectations for corporate earnings growth this year and next.

At the start of the year, investors had been counting on the U.S. economy to grow between 3 percent and 4 percent in 2011. “Now the Fed sees, at best, 1 percent to 2 percent growth for two years,” said Nick Sargen, who oversees $38 billion in assets at Fort Washington Investment Advisors in Cincinnati.

Wall Street’s volatility in part is a function of rapid-fire computerized buying and selling by aggressive short-term traders. Trying to profit from momentary moves in share prices, some traders use sophisticated computer programs to swap huge blocks of stocks in fractions of a second.

That played a role in Tuesday’s wild last-hour advance, said Raymond James’ McMahon.

Still, he said, much of the renewed selling on Wednesday came from large institutional investors such as hedge funds and mutual funds, reflecting their growing concern about the global economy.

“It’s not purely computer-driven,” McMahon said. “There is real volume here.”