Bank stocks plunged Monday along with the broader market after the government's bailout proposal failed to pass the House and Wachovia Corp. was forced to sell its banking operation in the latest big government-assisted bank deal.

The KBW Bank index sank nearly 21%, and the Dow Jones industrial average — in its biggest one-day point drop ever — shed 777 points, tumbling nearly 7%, the biggest percentage loss since Sept. 17, 2001.

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