New York - US stocks plummeted again on Thursday and the Dow Jones Industrial Average dropped below 9,000 points for the first time in five years, as a series of US and global efforts to tackle the financial crisis have failed to calm investors.

Both the blue-chip Dow and broader Standard & Poor's 500 tumbled more than 7 per cent. The Dow has now lost more than 35 per cent of its value since reaching all-time highs above 14,000 one year ago. The S&P's seven straight days of losses mark the longest downward streak since 1996.

The plunges came as the US Treasury indicated it would buy up shares in banks to help inject capital into shaky financial institutions. On Wednesday, a joint rate cut by seven of the world's central banks failed to spark a market rally.

US officials have also continued warning that a 700-billion-dollar rescue package would take some time to have an impact on the massive credit crunch that has struck the US economy.

"It took us a while to get here and it's going to take us a while to get out of this thing," White House economic advisor Edward Lazear told broadcaster CNN.

Finance ministers from the Group of Seven (G7) industrial nations meet Friday to consider additional responses to the financial crisis. There were indications that a summit of world leaders from the Group of Eight, which includes Russia, could take place next week.

The Dow plunged 678.91 points, or 7.33 per cent, to 8,579.19. The broad-based Standard and Poor's 500 tumbled 75.02 points, or 7.62 per cent, to 909.92. The high-tech Nasdaq Composite index shed 95.21 points, or 5.47 per cent, to 1,645.12.

The bulk of the day's decline was in the final hour of trading, a pattern that has been repeated often during the crisis.

"People have lost faith in everything," Philip Orlando, the chief market strategist of Federated Investors Inc, told Bloomberg News. "We're dealing with an investment community of atheists right now. Valuations no longer matter."

Car manufacturers led the sell off after market researcher JD Power & Associates forecast a sharp decline in car sales this year and next. General Motors Corp fell 31 per cent to its lowest level since 1950.

Oil giant Exxon Mobil Corp tumbled by the most in 21 years after the price of crude oil fell below 85 dollars per barrel in New York.

International Monetary Fund Managing Director Dominique Strauss- Kahn warned Thursday that the world was on the "cusp" of a recession as the crisis has spread well beyond the US.

The IMF on Wednesday cut its global growth forecast to 3.9 per cent this year and 3 per cent last year. Growth of below 3 per cent is rated by the IMF as a recession.

The dollar rose against the Japanese currency to 99.62 yen from 99.20 yen on Wednesday. The dollar also rose against the euro to 73.54 euro cents from 73.33 euro cents on Wednesday. (dpa)