US stocks plunged on rumors of bank nationalisations, a day after falling to six-year lows.
The Dow Jones Industrial Average fell 98.45 points (1.32 per cent) to 7,367.50 at the closing bell after posting Thursday its lowest closing level since October 9, 2002.
The tech-dominated Nasdaq dropped 1.59 points (0.11 per cent) to 1,441.23 and the broad-market Standard and Poor's 500 index shed 8.79 points (1.13 per cent) to 770.15, according to preliminary closing figures.
Traders were concerned about rumors of the possible nationalisation of banks saddled with losses stemming from a home mortgage crisis that has triggered global turmoil.
Stocks recovered slightly after the White House moved to calm market fears, saying banks should remain under private control.
"This administration continues to strongly believe that a privately held banking system is the correct way to go," White House spokesman Robert Gibbs told reporters.
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Weighing on investor sentiment "is the angst over the specter of mega banks Citigroup and Bank of America possibly being nationalised in the foreseeable future," said Patrick O'Hare, Briefing.Com.
"Whether that actually happens remains to be seen, but their stocks are acting as if it is a distinct possibility," he said.
US stocks dive on bank nationalisation fears