Dow Trips Below 10,000 On Chocking Credit Markets; Wall Street Drifts Deep Into Red

October 6, 2008 2:03 p.m. EST

New York, NY (AHN) - Stocks on Wall Street plunged on Monday on sell-off, sending the the Dow Jones industrial average below 10,000 for the first time in nearly four years.

Shares were dragged down after the bell as investors feared of deepening global concerns on slumping credit markets led by weakening banks' lending capacity.

The Dow Jones industrial average lost ground and fell by as much as 578 points or 5 percent in the first two hours of trading on Wall Street, before it pulled back to a 400-point loss. The drop of over 500 points is the lowest decline in a single day trading since October 25, 2004.

Over the period of one week, the index has lost more than 10 percent or 1,100 points as U.S.'s financial crisis spilled over to European markets as authorities were fiercely trying to prevent the financial services firms and lenders from collapsing.

At 1:30 p.m. EDT in New York, Standard & Poor's index was trading down by 61.06 points or 5.55 percent at 1,038.17 points, NASDAQ futures was moving down by 119.24 points or 6.12 percent at 1,828.15 points, while Dow was trading lower at 509.42 points or 4.93 percent at 9,815.96 points.

The investors have lowered their confidence in the banking shares in the region despite the U.S. government's effort to pass $700 billion financial-rescue package for distressed firms. But President Bush did warn that the rescue plan will not show its effect immediately.

Additionally, the Federal Reserve Board on Monday announced that it can boost the $600 billion to $900 by the end of this year. The Board also said it will provide extra $300 billion to the financial firms suffering from large distressed mortgage-linked assets.