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TORONTO - Traders around the world, battered by more than $2 trillion worth of stock losses Monday, assessed the damage and tried to determine how long the gloomy feelings that have engulfed the global economy will last.

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AP

Specialist Thomas Brown sits at his post on the New York Stock Exchange floor Monday. Wall Street suffered through another extraordinary and traumatic session, with the Dow Jones industrials plunging as much as 800 points – their largest one-day point drop – before recovering to close with a loss of 370.

"The mood is kind of disbelief," Ron Smith, strategist at Moscow-based Alfa Bank, said Monday after Russian markets had their biggest daily losses ever.

"Traders are just sitting there staring at the screens and going, 'Wow.' In this environment, nobody wants to step up to the table and buy a stock."

On Bay Street and Wall Street, panic selling continued as investors cashed out of the market and sat on the sidelines until the economic picture clears up. The Toronto market plunged 1,200 points early in the day and was off more than 700 points by mid-afternoon. Wall Street losses were more than 500 points.

"People are scared and the only thing they're doing is selling," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research. "Investors are cleaning out portfolios and getting rid of everything because nothing seems to be working."

Investors around the world appear to have turned a thumbs down on the Bush administration's US$700-billion Wall Street rescue plan, worrying it won't work quickly enough to unfreeze the credit markets.

Global banks, hobbled by wrong-way bets on mortgage securities, still remain starved for cash as credit has dried up and millions of companies and consumers can't get loans to spend, expand or buy everything from cars to new homes.

"The bailout plan was too late," said Paul Thornton, a Toronto-based money manager, assessing the market's current sentiment.

"The volatility will make it very difficult for investors to operate."

Fears about a global recession also caused oil to drop below US$90 a barrel; and the benchmark index that gauges fear in the stock market jumped to the highest level in its 18-year history.

European markets also fell sharply Monday, after governments across Europe rushed over the weekend to prop up failing banks, while the governments of Germany, Ireland and Greece also said they would guarantee bank deposits.

In South America, trading was halted twice on Sao Paulo's Ibovespa index after stocks sank 10 per cent, and markets were down in Argentina, Mexico, Chile and other countries.

Panicky traders had no idea when the market carnage in Latin America brought on by the U.S. mortgage default debacle would end.

"We didn't believe the volatility and uncertainty would so quickly reach the levels we've seen in the last few months," said Ociel Hernandez, an economic analyst with the Bancomer bank in Mexico City.

"In this moment, we're in the high part of a risky transition, the consequences of a global economic collapse."