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All 18 Western European markets posted major losses by the end of the day.

London’s FTSE 100 dropped 7.9 percent, the most in 20 years. France’s CAC 40 index plunged 9 percent, while German’s DAX index fell 7 percent. Russia’s Micex plummeted 19 percent, adding to earlier deep losses that have prompted Russia’s government to suspend stock trading numerous times.

The global contagion spread from major economies in Europe and Asia to emerging markets that until recently had enjoyed strong growth and sat out the market turbulence experienced in the West.

Latin American stocks fell by 5 percent to 6 percent, while China’s Shanghai index lost 5.2 percent and Indonesia’s Jakarta Composite Index plunged 10 percent, the steepest in two decades.

By the time New York markets opened, the contagion had wrapped around the globe. Wall Street’s nose dive turned into a free fall by midafternoon, taking the Dow on a journey into territory well below 10,000 for the first time in four years.

The Fed and Treasury Department rushed to carry out emergency powers approved in the bailout package, and said for the first time they were studying ways to make unsecured loans to financial firms, in their most drastic step to date to make money available to strapped banks.

Apparently prodded on by these efforts, U.S. stocks partly recovered at the end of the day, with the Dow ending down nearly 370 points, or 3.6 percent, at 9,955.50 The Standard & Poor’s 500 index fell 3.85 percent, while the Nasdaq Composite Index fell 4.3 percent.

While the U.S. indexes performed better than their European counterparts, they have sunk deep into bear market territory, with losses ranging from 25 percent to 30 percent so far this year.

Oil and other commodity prices plunged as investors liquidated holdings that are vulnerable to falling growth around the world, but safe-haven investments like Treasury bills, gold and other precious metals posted big gains.

Some analysts blamed the market downdraft on the failure of the U.S. bailout plan to prop up confidence.

Others said the plan was designed to only slow the deleveraging process, which financial leaders regard as painful but necessary to restore health to the economy. Still others said the plan had little impact on markets.