Worried that the $787 billion stimulus plan won't do enough to fix the ailing economy, investors sent stocks plummeting to a three-month low on Tuesday, the first day of trading after the holiday weekend.
Less than two hours into the morning session, the Dow Jones Industrial average sank 230 points, or about 3%, while the S&P 500 dropped to its lowest point since Nov. 20. By noon, all 10 industry groups in the S&P were had declined.
President Obama signed the multi-billion stimulus plan into law on Tuesday.
The declines come as jittery investors continue to assess Washington's response to the growing economic crisis. Last week, bank stocks plunged after Treasury Secretary Tim Geithner released a federal bank bailout plan that investors said provided few reassuring details.
On Tuesday, a Federal Reserve report show a continued contraction in New York manufacturing in February, pointing to a deeper recession. The report, which was released ahead of early morning trading, is convincing some investors that Obama's efforts to turn the economy around are too little, too late.
"There's a growing sense that no matter who's in office, no matter how much they spend and on what, it's going to be a long, painful process to get out of this situation," Michael Shinnick, manager of the $100 million Wasatch-1st Source Long/Short Fund, told Bloomberg on Tuesday.
Deborah Barrow is the Editor-in-Chief of wowOwow.