NEW YORK » A case of post-election nerves sent Wall Street plunging yesterday as investors, looking past Barack Obama's presidential victory, returned to their fears of a deep and protracted recession. Volatility swept over the market again, with the Dow Jones industrials falling nearly 500 points and all the major indexes tumbling more than 5 percent.

The market was widely expected to give back some gains after a run-up that lifted the Standard & Poor's 500 index more than 18 percent and that gave the Dow its best weekly advance in 34 years; moreover, many analysts had warned that Wall Street faced more turbulence after two months of devastating losses.

“;The market has really gotten ahead of itself and falsely priced in that this recession wasn't going to be as prolonged as thought,”; said Ryan Larson, head of equity trading at Voyageur Asset Management, a subsidiary of RBC Dain Rauscher.

Beyond broad economic concerns, worries about the financial sector intensified after Goldman Sachs Group Inc. began to notify about 3,200 employees globally that they have been lost their jobs as part of a broader plan to slash 10 percent of the investment bank's work force, a person familiar with the situation said.

  The cuts were first reported last month. Goldman fell $7.57, or 8 percent, to $87.43.

Commodities stocks also fell after steelmaker ArcelorMittal said it would slash production because of weakening demand. Its stock plunged 21.5 percent.

Analysts said investors were also uneasy in advance of the U.S. Labor Department's October employment report, to be issued tomorrow.

Economists, on average, expect a 200,000 drop in payrolls, according to Thomson/IFR.

The Dow fell 486.01, or 5.05 percent, to 9,139.27. The blue chips had risen more than 300 on Tuesday, and last week rose 11.3 percent, their biggest weekly gain since 1974.

The S&P 500 index fell 52.98, or 5.27 percent, to 952.77. Through the six sessions that ended Tuesday, the index, the one most closely watched by market professionals, rose 18.3 percent.

The Nasdaq composite index fell 98.48, or 5.53 percent, to 1,681.64, while the Russell 2000 index of smaller companies fell 31.33, or 5.74 percent, to 514.64.

Declining issues outnumbered advancers by about 4 to 1 on the New York Stock Exchange, where consolidated volume came to a light 5.29 billion shares compared with 5.45 billion shares traded Tuesday.

The three-month bill, considered one of the safest assets around, fell to 0.42 percent from 0.48 percent late Tuesday. A low yield indicates high demand.

The yield on the benchmark 10-year Treasury note was unchanged at 3.73 percent.

The dollar was mostly lower against other major currencies, while gold prices fell.

Light, sweet crude dropped $5.23 to settle at $65.30 a barrel on the New York Mercantile Exchange.