New York - Major US stock indices plunged Thursday as monthly housing sales dropped to their lowest level in 10 years and a major investor predicted a 
1-trillion-dollar loss for the financial industry before the end of the mortgage crisis.

Sales of previously owned homes dropped 2.6 per cent from May to a seasonally adjusted, annualized rate of 4.86 million units in June, more than 15 per cent below June 
2007, the National Association of Realtors said.

An index of construction stocks tumbled 12 per cent on the housing figures, its biggest-ever one-day drop, according to Bloomberg News.

Bill Gross, who manages the world's largest bond fund, predicted that writedowns of mortgage-related assets could total 1 trillion dollars, more than double the losses incurred so far by financial institutions.

Financial shares dropped 6.7 per cent on Gross' outlook, paring gains in the last week as a housing rescue package has been making its way through the US Congress.

Shares of Ford Motor Company plummeted 15 per cent after the US automaker said it lost a greater-than-forecast 8.7 billion dollars in the second quarter of 2008 amid writedowns in the value of its assets.

The blue-chip Dow Jones Industrial Average plunged 283.1 points, or 2.43 per cent, to 11,349.28. The broader Standard & Poor's 500 Index dropped 29.65 points, or 2.31 per cent, to 1,252.54. The technology-heavy Nasdaq Composite Index fell 45.77 points, or 1.97 per cent, to 2,280.11.

The dollar edged up to 63.78 euro cents from 63.76 euro cents on Wednesday but fell to 107.39 Japanese yen from 107.97 yen.

Gold fell 50 cents to 922.30 dollars per fine ounce. (dpa)