Dow Closes Down Nearly 800 Points

CNBC.COM - The market screamed as the House vote on the Wall Street bailout bill teetered on the edge of a cliff — and then fell off.

"This is panic and ... fear run amok," Zachary Karabell, president of River Twice Research told CNBC. "Right now we are in a classic moment of a financial meltdown," he said.

"The mood is definitely the old expression, 'Fish or cut bait," said Matt Cheslock, a senior specialist at Cohen Specialists. "Everyone’s kind of upset with the political grandstanding that’s going on. We haven't solved any problems that we're in," he said.

The bill initially failed to get enough votes, sending the market into a tailspin, as congressmen and women huddled to try to shore up the votes to save it. To no avail: The bill was ultimately rejected, leaving the future of the bailout in question.

The Dow Jones Industrial Average ended down 7 percent, or 777.68 — its biggest one-day point drop in history — at 10365.45. The S&P 500 also logged its biggest one-day point drop, falling 106.59, or 8.8 percent, to 1106.42. The Nasdaq had its biggest one-day point decline since 2000, falling 199.61, or 9.1 percent, to 1983.73. The CBOE Volatility Index, widely viewed as the best gauge of fear in the market, surged 33 percent to more than 45.

Volume was light amid a lack of a buy side, which left the Dow swinging 100 to 200 points — sometimes in a matter of seconds.

The Dow dropped more than 700 points when the House rejected the bill, then pared that back to about 500, before swinging to a 600-point decline as the closing bell was ringing. Still swinging in those final minutes after the bell, the Dow settled down nearly 800 points.

That quick 200-point paring in the Dow's loss earlier was likely due to the fact that the market was expecting another vote, Pimco fund manager Bill Gross told CNBC.

But lawmakers said there wouldn't be another vote today.
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