NEW YORK — Wall Street suffered through another extraordinary and traumatic session Monday, with the Dow Jones industrials plunging as much as 800 points — their largest one-day point drop — before recovering to close with a loss of 370.

The catalyst for the selling, which also took the Dow below 10,000 for the first time in four years, was investors’ growing despair that the spreading credit crisis will take a heavy toll around the world.

“The fact is, people are scared and the only thing they’re doing is selling,” said Ryan Detrick, technical strategist at Schaeffer’s Investment Research.

The selling was so extreme that only 264 stocks rose on the NYSE — and 2,986 dropped. That’s a telling sign considering the stock market is considered a leading economic indicator, with investors tending to buy and sell based on where they believe the economy will be in six to nine months.

The Dow fell as much as 800.06, then recovered in erratic trading to a loss of 369.88, or 3.58 percent, to close at 9,955.50, closing below 10,000 for the first time since Oct. 26, 2004.

The Standard & Poor’s 500 index shed 42.34, or 3.85 percent, to 1,056.89; and the Nasdaq composite index fell 84.43, or 4.34 percent, to 1,862.96. The Russell 2000 index of smaller companies dropped 23.49, or 3.79 percent, to 595.91.

In Asia, the Nikkei 225 closed 4.25 percent lower. Europe’s stock markets also declined, with the FTSE-100 down 5.77 percent, Germany’s DAX down 7.07 percent, and France’s CAC-40 down 9.04 percent.

The global sell-off came after governments across Europe rushed to prop up failing banks, while the governments of Germany, Ireland and Greece also said they would guarantee deposits. As the U.S. tries to repair its battered banking system, the German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG. And France’s BNP Paribas agreed to acquire a 75 percent stake in Fortis’ Belgium bank after a government rescue failed.