The Dow Jones industrials sank more than 350 points as the deepening fiscal crisis in Russia again rattled markets around the globe and doubts about Japan's resolve to stabilise its economy intensified.

The Dow fell 1171 points, or 12.5 per cent, below its July 17th record high closing of 9337.97. A drop of 10 per cent is considered a "correction", while a sustained decline of 20 per cent marks a bear market.

The Dow, once up 18.1 per cent this year, is now up just 3.3 per cent.

It was the biggest point drop since October 27th, when the index of blue chip stocks lost 7 per cent, spiralling 554.26 to 7,161.15. Even that slide, however, was nowhere near the severity of the 508-point drop of October 19th, 1987, when stocks lost a whopping 22.61 per cent in a single day.

Broader stock indicators were also posting huge losses after another day of heavy selling overseas.

The NYSE composite index dropped 20.74 to 518.82, and the American Stock Exchange composite index fell 24.84 to 169.08.