The backlash from an horrific Christmas season for US retailers has begun with an online toy seller filing for bankruptcy protection and more stores expected to do the same.

Confirmation that the US is in a recession and signs pointing to a prolonged downturn sent Wall Street plunging once again today, hurtling the Dow Jones industrials down nearly 700 points and more than half of last week’s big gains. All the major indicators more than 7%, and the Standard & Poor’s 500 index dropped nearly 9%.