Updated from 11:58 a.m. EDTU.S. stocks traded erratically Monday, as has been the story for weeks, and ultimately closed lower as the prospect of a global recession continued to loom. After a lower open and a sizable rally in afternoon trading, the three major averages sold off sharply into the close. The Dow Jones Industrial Average swung in a 450-point range, and then ended with a loss of 203.18 points, or 2.4%, at 8175.77. The S&P 500 lost 27.85 points, or 3.2%, to 848.92. The Nasdaq was down 46.13 points, or 3%, at 1505.90. When the new week began, financial firms, major players in the global crisis, were in focus. The Financial Times Web site reported that Goldman Sachs ( GS) chief Lloyd Blankfein approached Citigroup ( C) head Vikram Pandit about a merger. Pandit turned down the proposal, which was made in September, the report said. Goldman dropped 7.5% to $92.88, and Citi gave back 3.4% to $11.73. Also, as the Treasury Department's $700 billion Troubled Asset Relief Program to buy equity stakes in troubled banks got underway, several companies announced their participation in the initiative. Among them, KeyCorp ( KEY) and Huntington Bancshares ( HBAN) announced they would take part in the Treasury plan to purchase stock in banks facing liquidity troubles. KeyCorp shares edged down 2% to $9.92, and Huntington gained 15% to $9.17. SunTrust ( STI), meanwhile, said it would slash its dividend 30% and apply to sell stock and warrants to the government. Shares added 0.7% to $35.34. The Federal Reserve was also working to shore up short-term debt markets and get companies to lend to one another. The Fed said it will give companies a rate of 1.88% for three-month, high-grade commercial paper and buy asset-backed debt for 3.88%. Three-month dollar Libor, a measure of the rate banks charge one another for large loans, ticked down to 3.51% from 3.52% Friday. The overnight Libor rate was at 1.27%.