Wall Street Ends Wild Ride Down 370 Points

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NEW YORK - Wall Street suffered through another extraordinary and traumatic session Monday, with the Dow Jones industrials plunging as much as 800 points - their largest one-day point drop - before recovering to close with a loss of 370. The catalyst for the selling, which also took the Dow below 10,000 for the first time in four years, was investors' growing despair that the spreading credit crisis will take a heavy toll around the world.

Investors have come to the realization that the Bush administration's $700 billion rescue plan and steps taken by other governments won't work quickly to unfreeze the credit markets.

That sent stocks spiraling downward in the U.S., Europe and Asia, and drove investors to sink money into the relative safety of U.S. government debt. Fears about a global recession also caused oil to drop below $90 a barrel.

"The fact is, people are scared and the only thing they're doing is selling," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research. "Investors are cleaning out portfolios and getting rid of everything because nothing seems to be working."

The selling was so extreme that only 264 stocks rose on the NYSE - and 2,986 dropped. That's a telling sign considering the stock market is considered a leading economic indicator, with investors tending to buy and sell based on where they believe the economy will be in six to nine months.

In a new CBS News poll, 55 percent of Americans now say the economy is in very bad shape - the highest number ever recorded in the poll - and three out of four see the economy getting worse.

Major department stores like JC Penney, the Gap, Dillard's and Nordstroms all saw their September sales slip more than 5 percent according to early estimates, reports CBS News correspondent Anthony Mason.

As Wall Street reeled and global markets plunged, President Bush on Monday said the U.S. economy is going to be "just fine" in the long run. But he cautioned that the massive rescue plan will take time to work.

Bush said: "I believe that in the long run, this economy is going to be just fine." He said it will take the Treasury Department some time to enact a $700 billion plan to buy up troubled assets from financial firms so that credit will start flowing again to consumers.

As the dust settled after last week's bailout, a clearer picture of why the U.S. banking system malfunctioned has come into focus.

With its clients clamoring for safe investments with above average return, the big Wall Street investment houses bought up millions of the least dependable mortgages, chopped them up into tiny bits and pieces, and repackaged them as exotic investment securities that hardly anyone could understand.

Monday's stock trading extended what has been an exceptional stretch of volatility, in which triple-digit drops in the Dow are becoming almost commonplace; in the past week, the blue chips have fallen more than 1,100 points, or nearly 11 percent. This latest decline indicates that investors are becoming more convinced that the country is leading a prolonged economic crisis that is shifting to other nations.