NEW YORK (AP) – The stock market suffered one of its worst days since the financial meltdown Monday, slicing 680 points off the Dow Jones industrial average as Wall Street snapped out of its daydream of a rally and once again faced the harsh reality of a recession.

Not only did stocks end their five-day winning streak, they erased more than half the gains. The Standard & Poor’s 500 stock index, one of the broadest market gauges, lost nearly 9 percent.

Erasing any lingering doubts, there was also finally an officially declared recession – in progress in the United States since December 2007, according to the National Bureau of Economic Research, the nonprofit group of economists that classifies business cycles.

“This is just another episode in a long story and the story is all about recession and the question is how long and how deep,” said Chuck Widger, chief executive and chairman of investment management firm Brinker Capital. “We’re going to have continuing volatility until investors have better visibility.”

“All the data is being filtered to answer the two questions of how deep and how long the recession will be,” he added.

The selling was broad and deep. All 30 of the stocks in the Dow Jones industrial average finished lower. On the New York Stock Exchange, more than 7 stocks fell for every one that rose.

The Dow lost 679.95 points to close at about 8,149. There have only been three days in market history with bigger point losses for the Dow – the Monday after the Sept. 11 attacks, and Sept. 29 and Oct. 15 of this year.

Bond prices jumped as investors sought the safety of government debt. The yield on the three-month Treasury bill, considered one of the safest investments, slipped to a very slim 0.03 percent. That indicates investors are willing to accept tiny returns just to park their cash somewhere safe.

Investors were also nervous after weekend sales figures indicated that many Americans will cut back their trips to the mall this holiday season. Monday brought additional bad news: Manufacturing had dropped to its worst levels in 26 years and that construction spending fell by a larger-than-expected amount in October.

Although Monday’s plunge was notable because it cut short a five-day rally – the first such winning streak for the Dow and the S&P 500 since July 2007 – it also fit what has become a pattern on Wall Street: The market makes big moves higher, including triple-digit gains in the Dow, only to quickly give them back as another batch of bad news arrives.

“We’ve got a tug-of-war of war going on,” said Al Goldman, chief market strategist at Wachovia Securities in St. Louis. “On one side there’s the prospect of several more months of bad economic news and on the other side there’s lots of stimulus already on the table.”

Treasury Secretary Henry Paulson said Monday the Bush administration is looking for more ways to tap the $700 billion financial rescue program and will consult with Congress and the incoming Obama administration.

The decline Monday indicated that last week’s rally was merely a hiatus from, not an end to, the wrenching volatility on Wall Street since the market’s peak in October 2007 peak.

During the five-day win streak, which began when word reached Wall Street that President-elect Barack Obama would name New York Federal Reserve chief Timothy Geithner as his treasury secretary, the Dow had gained 1,276 points, and the S&P 500 had surged almost 20 percent.

In normal times, the markets might gain that much in two good years, not five days. So analysts said a pullback was understandable.

Friday’s unofficial start to the holiday shopping season wasn’t the bust that some investors had feared but indicated that, at best, consumers will be more fickle in their spending this year.

Retail sales jumped Friday as consumers snapped up items like flat-panel televisions and video game consoles that carried huge discounts. But parking lots became less crowded Saturday and Sunday.

Downbeat economic reports only fanned investors’ concerns. The Institute for Supply Management, a trade group of purchasing executives, said its index of manufacturing activity fell to a 26-year low in November. At the same time, the Commerce Department said construction spending fell by a larger-than-expected amount in October.

The weak readings weren’t a surprise, but they offered further evidence that the economy is suffering.

Financial stocks tumbled as investors grappled with doubts about the ultimate success of the government’s efforts to prop up the banking sector. Citigroup tumbled 22 percent, while Morgan Stanley stock fell 23 percent and Goldman Sachs Group Inc. fell 17 percent.

Wall Street is also awaiting some sort of resolution for automakers, who return to Washington this week in search of $25 billion in government support. General Motors Corp., Ford Motor Co. and Chrysler LLC are scheduled to hand Congress their plans for remaking themselves with government money.

The price of oil fell sharply after the Organization of the Petroleum Exporting Countries decided not to cut production over the weekend and as investors bet slowing economic activity would hurt demand. Light, sweet crude dropped $5.15 to $49.28 a barrel on the New York Mercantile Exchange.

Only 218 stocks were in positive territory on the New York Stock Exchange while 2,693 declined. Consolidated volume came to 5.79 billion shares; it was at 2.63 billion on Friday when the market was only open a half day.

The dollar fell against other major currencies. Gold prices also fell.

Overseas, Japan’s Nikkei stock average fell 1.35 percent. Britain’s FTSE 100 was down 5.19 percent, Germany’s DAX index was down 5.88 percent, and France’s CAC-40 fell 5.59 percent.

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