Unnerved once again by Europe’s economic problems, investors rushed to buy United States government securities on Wednesday, sending the yield on the Treasury’s 10-year note down to a record low.


Stock prices, meanwhile, fell sharply on Wall Street after a broad selloff sent Europe’s markets down 2 percent or more. Analysts said the Treasury rally, as well as the selling in the European stock markets, was set off by new signs of weaker economic activity on the Continent.


“Almost the total focus on where the flight to quality is coming from is Europe,” said Kevin H. Giddis, the executive managing director and president for fixed-income capital markets at Morgan Keegan & Company.


“I did not think we would gain so much momentum over a very obvious issue that has no quick fix to it,” Mr. Giddis said. “There is a lot of cash coming in to U.S. Treasuries from everywhere.”


The buying spree sent the price of the benchmark 10-year Treasury note up 1-6/32, to 101-7/32, while its yield fell to 1.62 percent, from 1.75 percent late Tuesday. Its previous low was 1.67 percent.


On Wednesday, the European Commission said its indicator of business sentiment fell in May to 90.6 points from April’s revised 92.9 because of falling confidence, especially in industry and retail trade. In addition, the latest data from the European Central Bank showed that banks were not lending more, despite its liquidity measures, and that they have reduced their holdings of government bonds.


“Economic weakness in the euro zone is likely over the next year or two with or without the breakup of monetary union,” said John Higgins of Capital Economics in a research commentary.


Anthony Valeri, an investment strategist for fixed income at LPL Financial, said the latest data pointed to a “deep contraction” in the European economy. He also said the growing problems in the Spanish banking industry and the poor results of the latest Italian bond auction also spurred investors to seek a safe haven for their money.


“All of those conspired to help Treasuries here,” he said, adding that the decline of the 10-year Treasury yield was “shocking.”


Borrowing costs rose in Spain and Italy, but fell in Germany, where the yield on that nation’s two-year bond fell close to zero.


As the flight to safety steered money from Europe, the euro fell to an almost two-year low of $1.2368, from $1.2499 late Tuesday.


On Wall Street, the Dow Jones industrial average fell 160.83 points, or 1.3 percent, to 12,419.89. The broader Standard & Poor’s 500-stock index lost 19.10 points, or 1.4 percent, to 1,313.32, while the Nasdaq composite index dropped 33.63 points, 1.2 percent, to 2,837.36.


In Europe, the Euro Stoxx 50 index, a barometer of euro zone blue chips, fell 2 percent, while the FTSE 100 index in London fell 1.7 percent. The Madrid benchmark Ibex 35 index fell 2.6 percent. The CAC 40 index in Paris was down 2.2 percent.


The concerns about Europe’s economy also weighed on crude oil prices, which fell $2.94, or 3.2 percent, to $87.82 a barrel in late trading in New York.


Energy and financial stocks were among the notable losers on Wednesday. Schlumberger lost 4 percent to $64.18. Exxon was down 2.6 percent to $79.79. Bank of America and Citigroup each slid 3 percent, to $7.20 and $26 respectively.


Research in Motion fell 7.8 percent to $10.351. The company warned late Tuesday that it was likely to post its second-consecutive quarterly loss next month.


Shares in Facebook continued to fall, dropping 2.3 percent at $28.19. The stock has declined almost 26 percent from its initial public offering price of $38 earlier this month.


The latest economic data in the United States appeared to have little impact on the financial markets. An index of pending home sales fell by 5.5 percent in April compared with the previous month, dashing economists’ forecasts for the levels to remain unchanged.