Stocks Sink Further on Confirmation of a Recession

Beyond the dim economic reports, investors had other incentives to sell. Monday's session offered occasion for investors to close the book on November, which was filled with wild market swings, including a five-day surge in the Dow and S&P that closed out the month.

"We've had a lot of very extreme and in some cases bizarre market movements," said Brian Gendreau, investment strategist at ING Investment Management. He said that much of the volatility has been due to hedge-fund redemptions. That process may be anywhere between half to three-quarters done, he said.

Gendreau said he had been hoping for a bounce in the major averages that follows a major selloff and additional support from the end of the presidential race. "Maybe we got it, but maybe that was it," he said of November's month-end rally.

Corporate headlines did little to counter selling pressure. Before trading began, beleaguered automaker General Motors (GM Quote) was ironing out a plan to cajole Congress into giving it federal money, according to a report by The Wall Street Journal. The report indicated that GM's board is willing to explore all restructuring options, including a Chapter 11 bankruptcy filing, if it can't secure government funds.

Over the weekend, another report by the Journal said that GM was exploring other plans to shore up its balance sheet, including offering its debt holders the opportunity to swap credit for equity.

As the carmakers faced dire circumstances, the United Auto Workers called for Congressional aid for the Big Three.