"Some of the concern in the market is ... 'Did everyone wait too long? Have events begun to spiral that can't be reached back for?' You hope not. But there is some feel of that in the markets," Art Cashin, director of floor operations at UBS, told CNBC, while wearing, ironically, a Dow 10,000 hat.
Cashin said ideally we'd see a "capitulation selloff" today, maybe even into tomorrow morning, then get a "massive reversal."
Crude oil tumbled more than $4 a barrel to under $90 on fears that a global recession will dampen demand for energy.
That, of course, sent energy stocks spiraling, with ExxonMobil off 2 percent and Chevron off 5 percent.
One historical note of optimism, such big drops in commodities typically occurs at the end of a market downturn.
Bank stocks took the hardest hit: Citigroup , Bank of America and JPMorgan were among the biggest drags on the Dow, all three down more than 5 percent.
Regional banks got clobbered: National City was down more than 20 percent, while Sovereign Bancorp fell more than 10 percent.
Wachovia shares were briefly halted around noon amid news that Citigroup was filing a complaint, citing breach of contract, after Wachovia snubbed its bid in favor of a deal with Wells Fargo. Citi is apparently seeking $60 billion in damages.
A district court judge set a court hearing for Tuesday to decide whether an exclusivity agreement in Citigroup's bid to buy Wachovia's banking assets prevents a competing deal by Wells Fargo to go forward.
A House Oversight committee will hold hearings today on the collapse of Lehman Brothers. Former Lehman CEO Richard Fuld, who oversaw the demise of the venerable investment bank, will testify.
(Check out a timeline of Lehman's collapse.)
JPMorgan was accused of allegedly precipitating the collapse of Lehman Brothers by freezing Lehman assets days before it filed for bankruptcy protection, UK newspaper the Sunday Times reported.
Citing documents filed with a New York bankruptcy court late last week, the newspaper said that Lehman creditors have accused JPMorgan of freezing $17 billion in cash and securities on Friday, Sept. 12. Lehman filed for bankruptcy the following Monday.
ImClone was among the few advancers today, following news that it will be bought by Eli Lilly for $70 a share after rejecting a sweetened offer from Bristol-Myers Squibb .
The offer from Eli Lilly values ImClone, which makes the cancer drug Erbitux, at $70 per share, a premium of 51 percent to ImClone's closing share price on July 30, the day before Bristol-Myers made an offer of $60 a share.
EBay announced plans to reduce its work force by 10 percent and said it expects to beat its third-quarter earnings forecast. The online auctioneer also announced $1.3 billion in acquisitions — the Bill Me Later payment service and a Danish online-classifieds firm.
With hopes that the bailout package voted by Congress would calm the markets dashed, investors are now looking to the Federal Reserve to make the next move. Traders expect the Fed to slash the current 2 percent target Fed funds rate by a half point before its next meeting, Oct. 28.
>> Poll: Should the Fed Announce an Emergency Rate Cut?
UK Chancellor of the Exchequer Alistair Darling is considering a dramatic taxpayer-funded recapitalization of Britain's banks, the Financial Times reported on Monday on its Web site.
Germany offered a blanket bank deposit guarantee on Sunday in a bid to contain the spreading credit crisis as officials clinched deals to rescue Germany's Hypo Real Estate and recapitalize two other European banks.
It was followed by similar moves by Austria and Denmark, after Ireland issued the first such guarantee last week. Austria said it would raise the limit of guarantees from the current 20,000 euros -- but the new level is to be decided -- while Denmark guaranteed all deposits.
MONDAY: House Oversight hearing on Lehman collapse
TUESDAY: Bernanke, Stern speak; Fed minutes; consumer credit; Earnings season kicks off with Alcoa, Yum Brands; Second presidential debate
WEDNESDAY: Weekly mortgage applications; Fed's Plosser speaks; Pending-home sales; Weekly crude inventories; Earnings from Costco, Monsanto and Ruby Tuesday
THURSDAY: Retailers report Sept. sales; Bank of England announcement; Weekly jobless claims; Wholesale trade; Natural-gas inventories; Fed's Stern speaks; Earnings from Chevron
FRIDAY: Import/export prices; Trade gap; Treasury budget; Earnings from GE