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DOW DROPS TO 5-1/2-YEAR LOW

Wall Street has ended another highly volatile session with a big last-minute loss as the market's stubborn worries about a protracted economic downturn and tight credit erased budding optimism about a housing sector recovery. The Dow Jones industrial average skidded 203 points to its lowest close in 51/2 years, with almost all the decline coming in the last 10 minutes of the session.

"We were trading higher earlier on very light volume, but the buyers just couldn't gather enough momentum to keep it going," said Alfred E. Goldman, chief market strategist at Wachovia Securities. "When confidence is razor-thin, the nervous tension goes way up, and bam - the sellers take over.

"It's just an overall malaise about how bad the economic slump is going to be globally," he said.

That malaise grew particularly after credit ratings agency Moody's Investors Service in the last half-hour of trading Monday downgraded General Motors Corp. further into "junk" status, pointing to the sharp contraction of the U.S. auto market. Shares of GM, one of the 30 Dow components, sank 50 cents, or 8.4 percent, to $5.45.

It's been a devastating month for the stock market so far - if the Dow were to finish the month at Monday's levels, it would be the worst month since September 1931. The blue-chip index is now 42.28 percent below its peak of 14,164.53, reached Oct. 9, 2007, and at its lowest closing level since April 1, 2003.

Broader stock indicators showed more sizable losses. The Standard & Poor's 500 index fell 27.85, or 3.18 percent, to 848.92, and the Nasdaq composite index fell 46.13, or 2.97 percent, to 1,505.90.

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