By Carla Mozee

Major Latin American currencies and stock indexes tumbled Thursday as part of a global selloff, with fears about Europe's debt crisis continuing to have a stranglehold on the markets.

Brazil's Bovespa equity index slumped 2.8%. The broad-based losses pushed the index that tracks the region's biggest stock market further into the red for the year, by 15%. Mexico's IPC fell 2%, Argentina's Merval lost 3.6% and Chile's IPSA gave up 1.7%.

On Wall Street, the S&P 500 Index (SPX) recently fell 2.3%. The index has fallen from its 19-month high on April 23 by more than 10%, a level usually considered a correction.

Fears that debt problems in Europe will eventually hurt global economic recovery, and that European officials still remain uncoordinated in their response, have intensified in recent weeks. But even in the absence of solid news developments on a given day, "anytime the psychology turns so quickly," any excuse to sell is deemed as valid for investors, said Bruce Zaro, chief technical strategist as Delta Global Advisors.

"The euro crisis could spread...or it could not rain...or they're just in no mood to buy stocks," he said. Whatever their reasoning, investors are in the mindset to run from perceived risk, he said.

Among exchange-traded fund, the iShares MSCI Brazil Index Fund (EWZ) tumbled 4.5%. The iShares MSCI Mexico Index Fund (EWW) gave up 3.7% and the iShares MSCI Chile Investable Market fund (ECH) fell 1.6%.

Brazil's currency, the real, dropped more than 3% against the U.S., while Chile's peso lost more than 1%.

Mexico's peso skidded more than 2.5% lower, with investors setting aside a report showing that Mexico's economy expanded by 4.3% in the first quarter of this year from the year-ago period. Analysts polled by Dow Jones Newswires had expected growth of 3.8%. Gross domestic product declined 0.35% on a seasonally adjusted basis from the fourth quarter of 2009.

Along with worries about fiscally vulnerable countries in the euro zone came gloomy economic reports from the U.S. on Thursday. Weekly jobless claims unexpectedly rose and the Conference Board's index of leading economic indicators fell 0.1% in April, the first monthly decline since March 2009.

In Sao Paulo trading, shares of market heavyweight and oil giant Petrobras (PBR) fell 2.1% as a climb in the U.S. dollar pressured the energy market, where prices are denominated in dollars. Crude for June delivery fell 4% to $67.02 a barrel recently. Preferred shares of Petrobras have tumbled nearly 24% this year.

The company's chief executive, Jose Sergio Gabrielli, has said the shares have been hurt by uncertainty surrounding a plan under which the government proposes to grant Petrobras rights to explore and develop 5 billion barrels of crude in exchange for new shares in Petrobras. A vote on the swap plan is expected to be held on June 9, according to a Dow Jones Newswires report.

In Mexico, market heavyweight America Movil (AMX) fell 1.7% and decliners were led by a 5.6% fall in shares of airport operator Asur (ASR). Shares of cement maker Cemex (CX) slumped 1.8%.