The stock market plummeted Tuesday after a report said that businesses that account for a vast swath of the U.S. economy are now contracting.

The Institute for Supply Management's index of activity at non-manufacturing businesses fell to its lowest level since the 2001 recession. That means that a contraction is underway in industries that represent 90 percent of the U.S. economy, including companies as varied as hotels and restaurants, banks and insurance companies, telecommunications firms and retailers.

That led the stock market to record its steepest one-day fall in nearly a year. The Dow Jones industrial average was off 359.87 points, or 2.85 percent. The 3.05 percent drop in the broader Standard & Poor's 500 was the steepest single-day drop since Feb. 27, 2007. Stock indexes remain above their recent lows last month, however.

"It looks recessionary to me," said Scott Anderson, a senior economist at Wells Fargo & Co., speaking of the survey. "What started in the subprime mortgage market has spread across the economy. We're seeing it show up in Main Street America."

Need info ?
Simply Contact us & Use the online form...