NEW YORK (CBS NEWS) – U.S. stocks plunged on Monday, marking a second day of trading that generated steep declines, amid fears of rising inflation and potential rate increases by the Federal Reserve.

The Dow Jones Industrial Average plunged 1,175.21 points, or 4.6 percent, closing at 24,345.75 on Monday. Earlier in the afternoon, the index declined more than 1,500 points before recovering slightly. Even though it marks the biggest point drop ever, the market’s decline is far from the largest on a percentage basis. The largest historic percentage drop was on Oct. 19, 1987, when the market plunged more than 22 percent.

The two-day losing streak was sparked by a pickup in wages, which could usher in higher inflation. Average hourly earnings, which had been rising at a modest 2.5 percent in the recovery, increased by 2.9 percent from the year before, the Labor Department said on Friday. Some sectors also showed weakness, including banks following the punitive action by the Federal Reserve against Wells Fargo (WFC).

The two-day slump has wiped out the stock market’s gains so far this year. Investors are concerned that the recent period of low inflation and low interest rates may be coming to an end. Higher borrowing costs could eat into corporate profits, while also slowing down the market for houses, cars and other items bought using credit.

Prior to Monday, the biggest one-day drop in the Dow was on September 29, 2008, when the index plunged 777.68 points, or about 7 percent.

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