Source: CNNMoney.com

Stocks fell Wednesday for the third session in a row, with the Dow industrials tumbling over 400 points, as investors bet that a long and deep recession is on the horizon.

The Dow Jones industrial average (INDU) lost 411 points, or about 4.7%, to 8,282.66. It was the lowest close for the blue-chip average since it settled at 8,175 on Oct. 27.

Over the past three days, the Dow has fallen more than 660 points, or 7%.

Tech stocks were also lower, with the Nasdaq composite index falling (COMP) more than 5%, or 81.69 points, to 1,499.21, its lowest level since 2003.

The Standard & Poor’s 500 (SPX) index fell 5.2%, or about 46 points, to 852 – its lowest settle since Oct. 10. The small-cap average also slid to a session low of 850 points, nearing last month’s intra-day low of 839 points.

Declines were broad-based with 29 of the 30 Dow components falling. The one exception was General Motors, which recovered from a recent battering.

“This is the culmination of continued bad economic news,” said Todd Morgan, senior managing director of Bel Air Investment Advisors, a Los Angeles-based firm with nearly $6 billion in assets under management. “A crisis of confidence and fear is driving the market.”

Market jitters were reflected in the CBOE Volatility (VIX) index, or the VIX, which rose 8.2% to close at 66.5 – its highest level since Oct. 29.

Stocks opened lower as more bad news from major retailers stoked fears that anemic consumer spending will further undermine the economy.

“The concern is that the economy will turn out worse than the current forecast [and] the recession will be longer and more severe,” said Hugh Johnson, chief strategist at ThomasLloyd Global Asset Management in New York.

Prices for ultra-safe U.S. Treasury bonds rose while commodity prices tumbled. Borrowing costs continued to ease, though banks remain reluctant to lend.

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