Stocks plunged to a more than five-year low amid worries about the fate of the auto industry — and the economy — as a bailout for the sector grows increasingly unlikely.
The Dow Jones Industrial Average tumbled 427.47, or 5.1 percent, to close at 7997.28. The last time the Dow ended below 8,000 was in March 2003.
The S&P 500 index shed 6.1 percent to close at 806.58, while the Nasdaqlost 6.5 percent to close at 1386.42.
"The uncertainty around the auto makers is weighing heavy" on the market, Tim Mole, head of CFD's at SVS Securities, told CNBC. It's a "gauging point of the U.S. economy," he added.
Senate negotiators today sought to craft a compromise bailout planto help distressed auto makers as lawmakers pressed the heads of the Big Three to justify the need for urgent assistance.
Shares of General Motors shed 9.7 percent to $2.79, its lowest close in more than 65 years. Ford tumbled 25 percent to $1.26, its lowest close in nearly 26 years.
In the past 12 months, GM shares have lost more than 90 percent of their value and Ford is down more than 80 percent.
Financials were the hardest hit -- down a whopping 12 percent -- amid worries about the impact of the worsening credit and economic situation on banks.
Dow components Bank of America, JPMorgan Chase and Citigroup all fell to multiyear lows.
Citigroup plunged 23 percent to $6.40, a 13-year low, as investors continued to punish the stock amid concerns that the 52,000 job cuts announced this week indicate worse management than previously thought. Year to date, Citigroup shares are down nearly 80 percent.
Bank of America fell 14 percent to close at $13.06, and JPMorgan dropped 11 percent to close at $28.47.