US stocks suffered their biggest fall since Black Monday in response to the failure of Congress to approve the Treasury’s $700bn bail-out plan.

The S&P 500 – already pushed lower after an authorities-brokered sale of Wachovia and bail-outs in Europe deepened concerns over the health of the banking sector – plunged 7.2 per cent immediately after the Congressional vote, a fall that worsened towards the close. The Dow Jones closed down 777.7 points, its biggest one-day point decline ever.