Stocks fell sharply yesterday, closing a week without equal in the market's 210-year history as blue chips suffered the largest drop since the Depression in the 1930s on increasing fears over an extended war on terrorism and further erosion of the nation's wobbling economy.

Thousands of victims remain under mountains of rubble just blocks from the New York and American stock exchanges.

Investors dumped shares for the fifth straight day after President George W. Bush prepared the nation for war on Thursday night. Wall Street has been jittery about the possible US military response to the attacks.

"Right now, there are just falling knives everywhere," said Mr Dirk van Dijk, who helps manage $4.5 billion for the C.H Dean & Associates. "Who the hell wants to step in front of a freight train? On Monday we did some buying. Clearly we were immature." For the week, the Dow fell 14.3 per cent, Nasdaq lost 16.1 per cent, and S&P 500 tumbled 11.6 per cent.