US blue-chip stocks fell to their lowest level in seven months on Monday as heightened fears of a US economic slowdown and acute turmoil in world credit markets sapped further confidence from chastened investors.

A money market intervention by the New York Federal Reserve, a bail-out of two investment vehicles at HSBC and reports of heavy job cuts at Citigroup combined to depress sentiment. The sell-off once again gathered pace in the final hour of the session.