After rumors said the European Central Bank (ECB) rejected a Spanish bank's recapitalization plan, major U.S. and European stock, bond, commodity and currency markets all fell Wednesday.

U.S. stocks plunged as concerns over the European debt crisis continued to weigh on the market. By the time the New York stock market closed, the Dow Jones Industrial Average had lost 160.83 points, or 1.28 percent, to close at 12,419.86. The Standard & Poor's 500 was down 19.10 points, or 1.43 percent, to close at 1,313.32, while the Nasdaq Composite Index fell 33.63 points, or 1.17 percent, to close at 2,837.36.

Meanwhile, the U.S. National Association of Realtors said on the same day that its Pending Home Sales Index fell 5.5 percent from the March level to 95.5 in April, the lowest level in four months, raising risk aversion among investors and boosting the dollar.

In Europe, at the close on Wednesday, London's benchmark FTSE 100 index dropped 1.74 percent, Frankfurt's DAX 30 fell 1.81 percent, while the CAC 40 in Paris dropped 2.24 percent.

The stock market of debt-ridden Greece fell 3.19 percent, while Italy's MIB dropped 1.79 percent.

Spain's main IBEX 35 stock index closed down 2.58 percent to 6090.40 points, hitting the lowest point of the year.

Spain's bank crisis has also seen the interests on Spain's 10-year bond yields rise to 6.66 percent, the highest since the ECB injected cheap three-year loans into the banking system in November 2011, almost reaching the seven-percent red line.

Meanwhile, the 10-year bonds of Italy, another indebted eurozone member, broke six percent.

Moreover, global commodities resumed their sharp fell Wednesday. The 19-commodity Thomson Reuters-Jefferies CRB index slipped to a 20-month low.

The debt concerns weighed on the euro as the shared currency also dropped below 1.24 U.S. dollars Wednesday, the first time in nearly two years.

The domino effect of the European debt crisis and strong U.S. dollar meanwhile sent the crude oil price tumbling.

Light, sweet crude for July delivery dropped 2.94 dollars, or 3.24 percent, to settle at 87.82 dollars a barrel on the New York Mercantile Exchange.

In London, Brent crude for July delivery also declined sharply and last traded above 103 dollars a barrel.

Responding to the Spain issue, the ECB said in a statement released on Wednesday that "the European Central Bank has not been consulted and has not expressed a position on plans by the Spanish authorities to recapitalize a major Spanish bank."

Earlier, a report had said the ECB rejected a Spanish plan to recapitalize a bank by indirectly tapping the ECB for money to help the bank.

The nationalized lender Bankia, Spain's fourth largest bank, announced last Friday that it needed 19 billion euros (23.8 billion U.S. dollars) in state aid to shore itself up against its bad loans.