Wall Street slipped to lowest since 2003

Stocks dropped to their lowest in five-and-a-half years on Wednesday as investors tighten for a long economic downturn and automotive executives forecast a wide calamity without a government lifeline.

Shares of General Motors Corp plunged to the lowest in 66 years and Ford experienced a 26-year low, but the pain was spread not only in  the automotive sector. Financial shares fell by double-digit margins as slowdown in the commercial real estate market fueled fears of another wave in the credit crisis.

Later in the day, the Federal Reserve cut its economic growth forecasts through 2009, helping release a boom of selling that continued into the closing bell.

"We're witnessing the worst market crash in most people's lifetimes," said David Bianco, chief U.S. equity strategist at UBS in New York. "People seem to enjoy telling each other how bad it’s going to get and working themselves into frenzy. It's just becoming silly."

The Dow Jones industrial average tumbled 427.47 points, or 5.07 percent, to 7,997.28. The Standard & Poor's 500 Index fell 52.54 points, or 6.12 percent, to 806.58. The Nasdaq Composite Index lost 96.85 points, or 6.53 percent, to 1,386.42.

This was the first time the Dow closed below the 8,000 level since March 2003. The S&P 500 and the Nasdaq broke through last week's intraday lows, which were the lowest in more than five years.

Auto industry in the dumps

GM's stock slash its loss for the day almost in half, but still ended down 9.7 percent at $2.79 after earlier dropping to a 66-year low. Rival Ford slumped 25 percent to $1.26 as investors worried about the possibility that there will be no quick proposal from Congress to solve the problems in the auto industry before its session draws to a close.

U.S. auto executives were on Capitol Hill for a second day to appeal their case for a $25 billion aid package. Hope for a bailout getting done this week remained unsure, even as legislators suggested compromises to the original plan.

Investors are worried about how a possible bankruptcy filing by U.S. automakers could further hurt an already vulnerable economy.

In the financial sector, Bank of America, JPMorgan Chase & Co and Citigroup all dropped to multiyear lows on persistent worries about the fallout that worsening credit and a contracting economy will have on banks.

Bank of America was down 14 percent at $13.06, JPMorgan shed 11.4 percent to $28.47 and Citigroup lost 23.4 percent to $6.40. The S&P financial index .GSPF skidded 11.6 percent.