German stocks closed lower Tuesday for a second day as the country struggles to recover from its worst-ever debt crisis and the election of Chancellor Angela Merkel.
The Dow Jones industrial average fell as much as 3.2 percent, while the Standard & Poors index lost 2.4 percent.
Stock markets in Europe and Asia have already been battered by the debt crisis, which has also hit Greece and Spain.
The European Union and some other countries have announced measures to bail out their financial systems.
The German government is trying to reduce its budget deficit to 3.5 percent of gross domestic product by 2020, down from 4 percent in the previous year.