* Global shares retreat as Wall St drops
* Rumors about French banks hit European markets
* Investors push into U.S. Treasuries, gold (Updates to U.S. close)
By Leah Schnurr
NEW YORK, Aug 10 (Reuters) - Fear of risk drove investors out of global stocks on Wednesday as rumors about the health of French banks sparked concern that the euro zone's debt crisis could claim new victims.
The rumors tapped into investors' worst fears of contagion. French bank stocks tumbled and led European markets lower. U.S. stocks fell more than 4 percent, while safe-haven gold hit another record.
"What we're seeing here is the fear and rumor-mongering that's coming out of Europe. It eerily reminds me of the fall of 2008, where you would see one financial institution after another be lined up in the cross-hairs of the traders," said Cliff Draughn, chief investment officer at Excelsia Investment Advisors in Savannah, Georgia.
Shares of Societe Generale
Societe Generale denied market rumors about the bank. It also asked France's stock market regulator to open an investigation. For details, see [ID:nLDE77912I]
The intensification of worries over the reach of the euro zone debt crisis took some of the comfort out of Tuesday's promise from the U.S. Federal Reserve to keep interest rates low for at least another two years.
The Dow Jones industrial average <.DJI> ended down 519.83 points, or 4.62 percent, at 10,719.94. The Standard & Poor's 500 Index <.SPX> lost 51.77 points, or 4.42 percent, at 1,120.76. The Nasdaq Composite Index <.IXIC> fell 101.47 points, or 4.09 percent, at 2,381.05.
The MSCI all-country world index <.MIWD00000PUS> was down 2.6 percent, while the FTSEurofirst 300 <.FTEU3> of leading European shares closed down 4 percent.
Gold racked up a third record in a row, extending its best rally since 2008. Spot gold