The Dow Jones industrial average fell below 7,000 for the first time in more than 11 years as investors grew pessimistic about the health of banks, and in turn the economy. The blue chips hadn't traded below 7,000 since Oct. 28, 1997, and last closed below that mark on May 1 of that year.
The credit crisis and recession have now slashed half the average's value since it hit a record high over 14,000 in October 2007.
Investors are fleeing financials after the government said it would give AIG another $30 billion in loans, besides the $150 billion it has already given the company.
Investors are worried about European financial companies, too. HSBC , Europe's largest bank by market value, reported a 70 percent drop in 2008 profit and said it needs to raise $17.7 billion and cut 6,100 jobs.
"As bad as things are, they can still get worse, and get a lot worse," says Bill Strazzullo, chief market strategist for Bell Curve Trading. Strazzullo believes there's a significant chance the S&P 500 and the Dow will fall back to their 1995 levels of 500 and 5,000, respectively.
And that leads to our Fast Money Reader Poll. After breaking below the psychologically important 7,000 level do you think the market will begin to stabilize.
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CNBC.com with wires