Stocks plummet in global market rout

Stocks slid more than 6 percent on Monday, with the Dow diving to its lowest level in almost five years, on fears the global economy was hurtling into recession despite government efforts to contain the fast-spreading financial crisis.

Wall Street’s drop was part of a global sell-off, and as severe as the U.S. losses were, they paled in comparison to sharp declines across Europe and in emerging markets. In Russia, Brazil and Peru, trading was temporarily suspended.

The emergency rescue of two big European banks and a move by several European governments to guarantee bank deposits intensified fears of a potential global recession.

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The sharp drop came in the first session since the U.S. Congress approved a $700 billion bailout of the financial industry. Financial services stocks led the sell-off, with the S&P’s financial sub-index down 8 percent.

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Energy companies’ shares plummeted as the price of oil dropped to an 8-month low below $90 a barrel on expectations the growing financial crisis will further slow already faltering global fuel demand.

“The economy, the global economy is a worry, with credit tight and everyone hoarding cash,” said Neil Massa, senior U.S. trader at MFC Global Investment Management.

“The global markets are worse than even we are and that’s not good news for any companies that depend on the overseas markets.”

The Dow Jones industrial average fell 711.01 points, or 6.89 percent, to 9,614.37. It is the first time the Dow has traded below 9,700 for the first time since November 2003.

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