Stocks tumbled in New York after the opening bell this morning, prompting fears that America is heading into another deep economic recession.

Blue-chips, including Dow heavyweights like Bank of America - the country's largest lender - and JPMorgan Chase, dragged the Industrials Index down more than four percent in the first hour of trading. The S&P 500 plummeted 4.5 percent and the Nasdaq index was down nearly five percent on early trading.

Both America and Europe are "dangerously close to recession," Morgan Stanley analysts told Bloomberg News. "Recent policy errors, especially Europe's slow and insufficient response to the sovereign crisis and the drama around lifting the U.S. debt ceiling, have weighed down on financial markets and eroded business and consumer confidence."

The past month, usually the quietest trading month of the calendar year, is shaping up to be one of the most volatile periods in the securities markets during the last five years.