The Dow plummeted nearly 350 points Thursday as recession fears enveloped Wall Street, eclipsing the latest efforts in Washington to rescue financial markets with a $700 billion bailout plan. 

Today's Market

The Dow Jones Industrial Average lost 348.22 points, or 3.22%, to 10482.85. The broader S&P 500 Index fell 46.78 points, or 4.03%, to 1114.28, while the Nasdaq Composite Index slid 92.68 points, or 4.48%, to 1976.72. The consumer-friendly Fox 50 Index dropped 27.07 points, or 3.14%, to 836.33.

For the first time in weeks, the markets reacted to the latest indicators that the U.S. economy is in trouble. New reports showed jobless claims rose to the highest level since September 2001 and factory orders plunged by the sharpest percentage in nearly two years.

“This economic news and these numbers coming out are just reinforcing the fact there’s still a big problem. [The rescue] bill isn’t going to make everything all hunky-dory tomorrow," said Michael Mainwald, head trader at LEK Securities. 

The markets weren't helped either by the continued uncertainty surrounding the $700 billion financial rescue package. While the Senate gave the bill a green light late Wednesday, it's not a given the House of Representatives will do the same on Friday. 

“I do think that people sense the economic situation is even more trouble than this bill could solve,” said Kenny Polcari, managing director at ICAP Equities. 

General Electric (GE) led the way down on the Dow, diving nearly 10% after it priced its $12 billion common stock offering. Aluminum giant Alcoa (AA) and Caterpillar (CAT) fell nearly as hard. Defensive stocks Kraft (KFT) and Proctor & Gamble (PG) were two of the only Dow components to close in the green. 

Underscoring the economic uneasiness pervading the markets, The Wall Street Journal reported Thursday the Federal Reserve is considering new interest rate cuts. The central bank doesn't meet again until late October, but the markets have begun to bet on an intrameeting rate cut. 

The day's first ugly economic report came via the Labor Department: weekly jobless claims rose by 1,000 last week to 497,000 -- the highest level in seven years. Economists had been expecting claims to fall to 476,000. Continuing claims filed by people on unemployment benefits for more than four weeks rose to 3.59 million. 

The report raises anxiety ahead of Friday's important monthly jobs report, which is expected to show further deterioration in the nation's already weak labor markets. 

The markets fell further after the Commerce Department said U.S. factory orders fell by 4% in August. Economists had been expecting a more modest decline of 2.5%. 

“I think everybody is focusing on the economic data we had today. Sentiment in general is not very good today because there are still so many questions surrounding the [rescue] package,” NYSE trader Doreen Mogavero of Mogavero, Lee & Co. told FOX Business.

Wall Street's badly-desired rescue plan received a second life Wednesday night when the Senate passed the bill 74-25. It now heads to the House for a likely vote on Friday, but that chamber narrowly defeated a similar measure on Monday, sending the markets into an epic tailspin. 

The rescue package that passed the Senate includes a series of measures aimed at making the legislation more appealing to both conservatives and populists, including provisions raising the deposit insurance limit to $250,000, easing the rules on certain accounting rules and tax extenders for individuals and businesses. 

Still, the primary objective remains the same: authorization for the Treasury to buy and hold up to $700 billion of toxic mortgage-backed securities from banks in an effort to unlock credit markets. 

Recession fears weighed heavily on crude oil Thursday, pushing it below $94 a barrel. Oil futures ended at $93.97 a barrel, down $4.56 on the day. The energy market dumped the commodity on fears that further weakness in the global economy will lower demand. 

Transportation stocks failed to rally on the lower oil prices, reflecting the economic anxiety. The sector closed almost 9% lower with railroaders CSX (CSX) and Union Pacific (UNP) falling even further. 

Corporate Movers

General Electric (GE) didn't receive a bounce from Warren Buffett's $3 billion investment as it priced a $12.19 billion common stock offering at $22.25 a share Thursday morning -- a 9.2% discount to the company's closing price on Wednesday. 

MetLife (MET) took the unusual step of releasing a statement to say it is a financially sound company with high ratings from all of the major insurance ratings agencies. The statement came after Senate Majority Leader Harry Reid reportedly said there is talk of a major insurance company on the verge of bankruptcy. Shares of rival insurers like Prudential (PRU) and Hartford Financial Services (HIG) fell sharply as well. 

Marriott (MAR) saw its shares slide after posting a weaker-than-expected profit and warning of more trouble ahead for next year. 

Bank of America (BAC) announced Merrill Lynch (MER) Chairman and CEO John Thain will join BofA when the two companies merge. Thain will hold the title of president of global banking, securities and wealth management. 

Ford Motor (F) CEO Alan Mulally said he believes the U.S. recession will be "deeper and longer" than previously expected. Mulally doesn't expect an improvement in auto sales until 2010 at the earliest.  

Monsanto (MON) plunged to 52-week lows after the fertilizer was downgraded to "underperform" from "buy" by Merrill Lynch on an uncertain near-term earnings forecast. Monsanto wasn't alone as Merrill also cut ratings on Potash (POT), Agrium (AGU), Mosaic (MOS) and other fertilizer companies. The downgrades came after Mosaic posted weaker-than-expected earnings Wednesday. 

Global Markets 

The European Central Bank decided to keep its interest rate steady at 4.25% with ECB President Jean-Claude Trichet saying that the threat of inflation remains high. The Euro fell to a one-year low against the U.S. Dollar. 

London's FTSE 100 Index fell 89.25 points, or 1.80%, to 4870.34. The Dow Jones Euro Stoxx 50 dropped 59.84 points, or 1.95%, to 3007.51.