US stocks plunged, on Thursday, extending a sell off to four days, as policymakers' failure to arrest global economic stagnation sent markets spiraling downward. The heavy volume, with which stocks crashed signaled that investors are selling in anticipation of more losses. Wall Street's 'fear gauge', the CBOE Volatility Index, jumped 12 percent. Energy and materials shares were among the hardest hit, on signs of a slowdown in China. Banks also lost ground as the Fed's plan to lower long-term rates will compress margins for banks that borrow at short-term rates and lend at longer-term rates. The declines also came a day after Moody's cut debt ratings for big lenders. So the Dow Jones industrial average dropped 391 points, or 3.5 percent, to 10,734. The Standard & Poor's 500 Index lost 37 points, or 3.2 percent, to 1,130. And the Nasdaq Composite Index slid 83 points, or 3.3 percent, to 2,456. China's once-booming manufacturing sector contracted for a third consecutive month, while the Euro zone's dominant service sector shrank in September for the first time in two years.