NEW YORK » Wall Street hit levels not seen since 2003 yesterday, with the Dow Jones industrial average plunging below the 8,000 mark amid a dour economic outlook from the Federal Reserve and worries over the fate of Detroit's three automakers.

A cascade of selling occurred in the final minutes of the session as investors yanked money out of the market. For many, the real fear is that the recession might be even more protracted if Capitol Hill is unable to bail out the troubled auto industry.

The S&P 500, widely considered the broadest snapshot of corporate America, slipped 52.54 points, or 6.12 percent, to 806.58; and the Dow gave up 427.47 points, or 5.07 percent, to 7,997.28. Both closed at their lowest levels since March 2003, and are rapidly approaching the lows of the 2000 to 2002 bear market.

The selling on the New York Stock Exchange was staggering—only 158 companies that trade there finished the day positive while 2,943 declined. Volume again was light, a symptom of the market's recent volatility, with 1.63 billion shares exchanging hands by the close.

Other major indexes were also clobbered. The technology-heavy Nasdaq composite index fell 96.85 points, or 6.53 percent, to 1,386.42. The Russell 2000 index of smaller companies gave up 35.13, or 7.85 percent, to 412.38.

Investors were rattled on prospects that General Motors Corp., Ford Motor Co. and Chrysler LLC might not get a $25 billion rescue package before Congress quits for the year. The heads of those companies told lawmakers that time is running out, and that if one of them collapsed it would have a disastrous impact on the already battered economy.

Ford shares, which traded as high as $8.79 in the past year, plunged 42 cents, or 25 percent, to $1.26. GM, a stock worth $29.95 in the past 52-weeks, fell 30 cents, or 9.7 percent, to $2.79.

In the minutes from its last rate-setting meeting in October released yesterday, the Fed signaled additional interest rate reductions may be needed to help combat the worst financial crisis to jolt the country in more than a half-century.

The Fed predicts that, with the economy forecast to lose traction or maybe jolt into reverse, unemployment will move higher.

The uncertainty was evident after the government released two separate reports on consumer prices and new-home construction, more evidence that the economy remains in flux.

Volatility in the stock market has kept demand for Treasury bonds high. The yield on the benchmark 10-year Treasury note fell to 3.32 percent from 3.53 percent on Tuesday.

The stock market's big drop also influenced oil prices. Light, sweet crude fell 77 cents to settle at $53.62 a barrel on the New York Mercantile Exchange, about where prices were in January of 2007.

Consolidated volume on the New York Stock Exchange came to 6.44 billion shares up from 5.4 billion on Tuesday.