The leading blue-chip Dow Jones Industrial Average closed down a sharp 153.54 points (1.29 percent) at 11,740.15 at the closing bell, marking its lowest closing depths since October 2006.
The index is down more than 11 percent for the year to date.
The tech-dominated Nasdaq composite tumbled by a more substantial 43.15 points (1.95 percent) to 2,169.34 and the Standard & Poor's 500 broad-market index finished 20.00 points (1.55 percent) lower at 1,273.37.
All three markets had also sustained losses on Friday amid simmering fears that the US economy, weighed down by a housing slump, a credit squeeze and mounting job losses, is sliding into a recession.
"Wall Street is clearly nervous. More bad news on spreading problems in the credit markets combined with growing evidence of a slowing economy has sent mark