The Standard and Poor's 500 Index fell 90.31 points to 907.77, Bloomberg reported, while the Dow Jones Industrial Average fell 733.48 points, or 7.9 percent, to 8,577.51, marking its second-biggest point drop in the history of the index. The Nasdaq Composite Index lost 150.68 to 1,628.33. Bloomberg also reported about 42 stocks fell on the New York Stock Exchange for each that rose.
Following on the weekend moves by European nations to shore up major banks, Philippine President Gloria Macapagal Arroyo announced that Asian countries would create a fund to help any countries in that region suffering liquidity problems, with the World Bank committing $10 billion, The Associated Press reported.
The agreement was reached in Washington after a meeting of finance officials from the 10-member Association of Southeast Asian Nations and their partners from Japan, China and South Korea, along with representatives of international lending institutions.
After falling through the day, Tokyo's Nikkei 225 Average, bolstered in part by the Asian announcement, ended up 1.1 percent. But in India, Mumbai's Sensitive Index fell 5.4 percent in afternoon trading and the Hang Seng China Enterprises Index dropped 6.4 percent, according to MarketWatch.
"The risk of a recession is increasing. For the rest of the year, most global markets could be testing their lows," said Patrick Shum, strategist at Karl Thomson Securities in Hong Kong told MarketWatch. "I think the rebound we saw globally is over."
Major European and Middle Eastern Markets also headed lower after a record rally earlier this week.
Despite the $2 trillion poured into markets by central banks worldwide, concerns over corporate earnings continued.
"The authorities have really aligned themselves and done a lot, but the fact is that funds are facing redemptions," Ian McCall, director of Argo Capital Management in London, told Bloomberg News. "People are still facing reduced growth expectations."
In the United States, JPMorgan Chase and Co announced a third-quarter profit loss of 84 percent following the high-profile acquisition of Washington Mutual, Reuters reported. Net income dropped to $527 million, or 11 cents a share, from $3.4 billion a year earlier.
Despite the loss, JPMorgan executives say the company did better than expected considering market volatility.
"Given the uncertainty in the capital markets, housing sector and economy overall, it is reasonable to expect reduced earnings for out firm over the next few quarters," Chief Executive Jamie Dimon said in a statement.
Low confidence was also reflected in consumer spending, as retailers posted a 1.2 percent drop Wednesday, the lowest in three years. The drop follows a 0.4 percent decline last month, the Commerce Department reported, and the third-consecutive month of loss.
"Consumers are hunkering down," Brian Bethune of Global Insight Inc. told Bloomberg.
Concern the slowing economy will hurt demand caused companies such as Exxon Mobil and Chevron to fall more than 12 percent Wednesday, while Wal-Mart Stores Inc. dropped eight percent.
The U.S. Labor Department also announced Wednesday a 0.4 percent drop in the price paid to producers in September. The Federal Reserve Bank of New York's Empire State manufacturing index, which is seen as an indicator or general manufacturing trends, dropped to minus 24.6 in October from 7.4 in September, Bloomberg reported. The drop was the largest since the index began in 2001.
GM to Repay Government Loans Early, Cites Profit Progress 
