Washington  - US stocks plunged more than 5 per cent Monday after the US House of Representatives rejected a hotly debated 700- billion-dollar rescue plan for the US financial system.

Stocks were already sliding on the news of the collapse of the country's fourth-largest bank, Wachovia Corp, and banking giant Citigroup's intervention to buy up the bulk of its operations.

But investor uncertainty increased after the early afternoon vote in the House, which voted 228-205 against the bill. Republicans led the opposition, voting by 2-1.

At 1900 GMT, the Standard & Poor's 500 broad-based index had fallen 72.94 points, or 6.01 per cent, to 1,140.07. The blue chip Dow Jones Industrial Average shed a whopping 515.32 points, or 4.62 per cent, to 10,627.81. The high tech Nasdaq Composite Index lost 138.61 points, or 6.35 per cent, to 2,044.73.

Financial shares in the S&P 500 dropped 11 per cent, with the beleaguered Sovereign Bancorp Inc and National City Corp sinking more than 60 per cent.

Goldman Sachs Group Inc and Morgan Stanley, the two largest Wall Street securities firms, fell more than 19 per cent. (dpa)