U.S. stocks are again plunging, despite getting a brief reprieve Friday morning from a better-than-expected July jobs report.

The Labor Department reported that the U.S. economy gained 117,000 jobs in July (significantly better than the consensus expectations of 75,000 new jobs.

However, traders appear to be focusing on the European debt crisis, which is reaching emergency levels -- with Italy and Spain are believed to be in dire trouble, with a rising probability of defaulting.

Amidst extremely volatile trading, at noon (EDT) the Dow Jones Industrial Average is down 1.48 percent, the S&P 500 index has declined 2.26 percent; and the tech-heavy Nasdaq has slumped 3.06 percent.

Economically-sensitive Dow component Alcoa (NYSE: AA) is down 4.33 percent, while Caterpillar (NYSE: CAT) has slipped 3.20 percent.

On Thursday, indices rang up losses of between 3 percent and 4 percent, with the Dow plummeting more than 500 points – the worst such day since the height of the global financial crisis two and a half years ago.

"The crisis in Europe is quickly becoming on par with the financial crisis of 2008," David Levy, portfolio manager at Kenjol Capital Management, told CNN.

"The jobs report shows that things aren't getting much worse in the U.S., but the focus is clearly on Europe at this point.”

Oil futures are falling more than 2 percent, a sign that traders expect slower demand as the global economy decelerates.

Treasuries are slightly higher.