Huge sell-off on Wall Street

Wall Street sold off sharply today as concerns about a weakening credit market wiped out US investors' enthusiasm about strong retails sales during the holiday weekend.

The Dow Jones industrial average fell nearly 240 points.

Investors were unnerved by another series of announcements that pointed to continuing problems in the credit markets that stem from home loan debt going bad under the weight of a faltering housing market.

Two banks had bad news: Citigroup warned it was looking to cut costs - raising the possibility of further job cuts - and HSBC Holdings said it planned to bail out two funds it manages. To do so, Europe's largest bank plans to move about $45bn (€30.2bn) of the fund's assets on to its balance sheet.

Meanwhile, The New York Federal Reserve, acknowledging "heightened pressures" in money markets that are expected to continue for the rest of the year, said it planned to conduct a series of repurchase agreements aimed at boosting liquidity in the credit markets.

The announcement from the New York Fed, which carries out monetary policy set by the US Federal Reserve, essentially puts in writing many of the steps the Fed often takes at this time of year.

The Fed said it would inject $8bn (€5.4bn) into the banking system on Wednesday. The amount of money is somewhat larger than in past years at this time.

The Dow fell 237.44, or 1.83%, to 12,743.44, closing near the lows of the session.

Broader stock indicators also gave up ground. The Standard & Poor's 500 index declined 33.49, or 2.32%, to 1,407.21, and the Nasdaq composite index fell 55.61, or 2.14%, to close at 2,540.99.