Gordon Brown, the British prime minister, acknowledged for the first time on Wednesday that the world economic downturn is likely to cause a recession in the UK, the US and other countries.
Al Jazeera's Kristen Saloomey in New York said poor corporate profit reports had stoked the fears of investors on Wall Street.
Wachovia, the troubled US bank, on Wednesday reported a third-quarter net loss of $24bn amid its takeover by Wells Fargo.
Boeing, the US aerospace giant, allso said its third-quarter profits had fallen by 38 per cent to $695m.
On stock markets elsewhere, Japan's Nikkei share index closed down 6.8 per cent to end at 8,675 while the London FTSE 100 index closed down 4.46 per cent to close at 4,041 points.
Markets in South America also plummeted with Brazil's Bovespa stock exchange suspending trading for a period before closing down more than 10 per cent.
The Argentinian stock market also crashed by more than 10 per cent, following the government's decision on Tuesday to nationalise $30bn in private pension funds, saying it was necessary to protect pensioners from the global financial crisis.
Global crisis summit
Bush plans to invite members of the G20 group of nations to the summit, which includes the G7 major industrial economies plus key "emerging-market" countries such as China, India and Brazil.
Dana Perino, a White House spokeswoman, said on Wednesday: "The leaders will review progress being made to address the current financial crisis, advance a common understanding of its causes and, in order to avoid a repetition, agree on a common set of principles for reform of the regulatory and institutional regimes for the world's financial sectors."
Perino also said that the administration would seek input from the winner of the US presidential election, which will take place on November 4.
"The summit will also provide an important opportunity for leaders to strengthen the underpinnings of capitalism by discussing how they can enhance their commitment to open, competitive economies, as well as trade and investment liberalisation," the White House said.
European leaders had pushed for a summit before the end of the year and suggested that an overhaul of the financial system should be considered.