Fears of global recession deepen as stock markets plunge

"Recession is unavoidable at this point," said Marc Pado, stock market strategist at Cantor Fitzgerald. "Now it's just a matter of depth."

Despite the $700-billion bailout bill enacted last week, the Dow Jones industrial average plummeted 800 points, or 7.7%, before rebounding to close down nearly 370 points. The blue-chip barometer fell below the 10,000 level for the first time in four years. Stock markets in Europe plunged as much as 9% after a series of hastily arranged bank rescues there over the weekend.

Beyond the stock market, credit remained extremely tight, economic worries sent crude oil sinking more than $6 to less than $90 a barrel, and fearful investors huddled in super-safe Treasury securities -- the financial equivalent of hiding under the covers until the storm passes.

"In terms of the menagerie of investor emotions, we've already gone through anxiety, despair, panic and capitulation," said Sam Stovall, chief investment strategist at Standard & Poor's Equity Research. "Now we're wrestling with despondency."

The Dow finished down 369.88 points, or 3.6%, at 9,955.50 -- its lowest close since October 2004 and a level it first crossed in 1999 during the tech boom. The Dow has dropped 30% from its record close a year ago this week.

The broader Standard & Poor's 500 index fell 3.9% on Monday, while the technology-dominated Nasdaq composite index skidded 4.3%.

The stock sell-off came after investors spent the weekend absorbing more bad economic news last week, including a report showing a loss of 159,000 U.S. jobs last month.

Investors have been waiting for weeks or even months for signs of what is known on Wall Street as a capitulation -- the point in a market downturn where the news is so bad that every investor who plans to sell has sold -- the point where stock prices simply can't fall anymore.

But some analysts say the current panic isn't strong enough to suggest the market has hit bottom.

"I'm not getting the sense that people are ready to jump off a cliff yet," said Brian Rauscher, director of portfolio strategy at Brown Bros. Harriman in New York.

Nonetheless, for many individual investors who are seeing their personal savings shrink, there is "a level of panic and fear that I have not seen in years," said Rose Greene, a certified financial planner in Santa Monica.