Wall Street plunged late afternoon on Monday despite the U.S. new home sales surprisingly rose last month.

The U.S. Commerce Department reported Monday that sales of new single-family homes rose by 2.7 percent in September to 464,000 homes. Economists had expected sales would drop. Homebuilders in the S&P 500 rallied and limited the decline of the index.

The U.S. Treasury Department reportedly planned to start injecting money into major banks this week, which send regional banks higher in morning trading.

The Federal Reserve scheduled to hold a regularly two-day meeting Tuesday and Wednesday. And the market expected the central bank would lower its fed funds rate by a half-point to 1 percent on Wednesday.

Shares of General Motors Corp. tumbled Monday after credit ratings agency Moody's Investors Service downgraded it into "junk" status.

The Dow Jones Industrial Average fell 203.18, or 2.42 percent, to 8,175.77. The Standard & Poor's 500 index fell 27.85, or 3.18 percent, to 848.92, and the Nasdaq composite index fell 46.13, or 2.97 percent, to 1,505.90.

(Xinhua News Agency October 28, 2008)