Stock markets around the world recovered Thursday after a major sell off which took nearly 400 points off the Dow industrials on Wednesday.

Analysts blamed the drop on the growing concerns about Italy's debt crisis.

Fears that the country, the third largest economy in Europe, could default on its $2.6 trillion debt, had sent markets plunging as Italy's borrowing rate went above 7 percent.

Greece, Ireland, and Portugal had to seek financial help from other countries when their borrowing rates rose above that level.

However, unconfirmed reports indicated the European Central Bank has bought Italian bonds in an effort to get their yields down. This move has calmed financial tensions for now.

"There may be some stability now, but this storm has barely begun," said Louise Cooper, markets analyst at BGC Partners."Italy's fundamental problems remain."

European Union leaders are still trying to work out a solution for Italy. They're hoping they can prevent the crisis from spreading throughout the European economy and leading to a recession.