NEW YORK » Investors agonizing over a faltering economy sent the stock market plunging all over again yesterday after two disheartening reports convinced Wall Street that a recession, if not already here, is inevitable. The market's despair - fed by a stream of disheartening economic data - propelled the Dow Jones industrials down 733 points to their second-largest point loss ever, and the major indexes all lost at least 7 percent.

Yesterday's selloff began after the government's report that retail sales plunged in September by 1.2 percent - almost double the 0.7 percent drop analysts expected - made it clear that consumers are reluctant to spend amid a shaky economy and a punishing stock market.

The U.S. Commerce Department report was sobering because consumer spending accounts for more than two-thirds of U.S. economic activity.

Then, during the afternoon, the release of the Beige Book, the assessment of business conditions from the Federal Reserve, added to investors' angst. The report found that the economy continued to slow in the early fall as financial and credit problems took a turn for the worse. The central bank's report supported the market's belief that difficulties in obtaining loans have choked growth in wide swaths of the economy.

A sell-off that intensified late in the session left Dow down 733.08, or 7.87 percent, at 8,577.91. On Monday, Sept. 29, the Dow had its largest point drop 777.68. Yesterday's percentage drop was the biggest since Oct. 26, 1987, which followed Black Monday, the Oct. 19 crash that sent the blue chips down 22.6 percent in a single session.

The Dow's massive decline yesterday marks its 20th triple-digit move in 23 sessions.

Broader stock indicators also skidded. The Standard & Poor's 500 index fell 90.17, or 9.03 percent, to 907.84, and the Nasdaq composite index fell 150.68, or 8.47 percent, to 1,628.33.

The three-month Treasury bill yesterday was yielding 0.33 percent, up from 0.22 percent on Tuesday. Overall yields remain low, showing that demand is so high that investors are willing to earn meager returns as long as their principal is preserved.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.98 percent from 4.03 percent late Tuesday.

Meanwhile, the U.S. Labor Department said the producer price index, which measures inflation pressures before they reach the consumer, fell 0.4 percent in September, driven by lower energy costs. That decline matched analysts' expectations.

About 350 stocks advanced at the New York Stock Exchange, while about 2,800 declined. Volume came to 1.68 billion shares.

The Russell 2000 index of smaller companies fell 52.54, or 9.47 percent, to 502.11.

Light, sweet crude fell $4.09 to settle at $74.54 per barrel on the New York Mercantile Exchange.