Stocks plunge anew as recession worries resurface

The Dow Jones industrials fell nearly 500 points, and all the major indexes tumbled more than 5 percent.

The slide ended the best stretch since the financial meltdown began in mid-September, following a run-up last week that lifted the Standard & Poor's 500 index more than 18 percent and gave the Dow its best weekly advance in 34 years. The market had been expected to give back some gains, however, and analysts had warned that Wall Street faced more turbulence.

"The market has really gotten ahead of itself and falsely priced in that this recession wasn't going to be as prolonged as thought," said Ryan Larson, head of equity trading at Voyageur Asset Management, a subsidiary of RBC Dain Rauscher. "Regardless of who won the White House, these problems are not going away.

"We're in a really bad recession, period," he said. "People are locking in profits and realizing we're not out of the woods."

Worries about the financial sector intensified after Goldman Sachs Group Inc. began notifying about 3,200 employees globally that they had lost their jobs as part of a plan to slash 10 percent of its work force.

The cuts were first reported last month. Goldman fell 8 percent, while other financial names also fell. Citigroup Inc. dropped 14 percent.

Commodities stocks also fell after steelmaker ArcelorMittal said it would slash production because of weakening demand. Its stock plunged 21.5 percent.

The market expected Obama to win the election, but as the session wore on, investors clearly worried about the weakness of the economy and pondered what the new administration might do.

Analysts said the market is already anxious about Obama's upcoming selections for Treasury secretary and other Cabinet positions.