US stocks sank Wednesday after gloomy data underlined the deepening troubles in the world`s largest economy, with the Federal Reserve admitting the potential for a long recession.

The Dow Jones Industrial Average dropped 427.63 points (5.08 percent) to 7,997.12 at the market close and the tech-heavy Nasdaq skidded 93.85 points (6.33 percent) to 1,389.42.

The broad Standard & Poor`s 500 index retreated a whopping 51.86 points (6.04 percent) to 807.26, according to preliminary closing figures.