It was a terrible day on Wall Street. Investors wanted reassurance from the minutes of the Federal Reserve's August meeting, but they didn't get it.

On top of that, Merrill Lynch warned that ailing credit markets will hurt bank profits, and economic news confirmed the dismal outlook sending major indices down more than 2 per cent.

The Conference Board said consumer confidence index fell to 105 from nearly 112 in July, blaming the drop on turmoil in the stock and housing markets. It was the biggest drop since hurricanes Katrina and Rita hit back in September 2005.

And after dismal housing news on Monday, Standard & Poor's said its nationwide index fell 3.2 per cent in the second quarter, compared to a year ago.