Floating around the market were the usual fears about recession and corporate earnings. Volume was relatively light on Monday, which means big trades from a small group of investors could have swung the overall market. And some observers suggested that major players like mutual funds and hedge funds may have been forced to sell shares to meet redemption requests from skittish clients.  “None of us can prove it at the present time, but based on the behavior of the market and what you hear anecdotally from traders, you get the sense there are still margin calls and liquidations from funds that push this market to the downside,” said David Kovacs, quantitative strategist at Turner Investment Partners.  Even so, as the sun began to set on Lower Manhattan on Monday, it had seemed as if investors would eke out a flat close. Instead, shares of regional banks, which had been bolstered by news of new capital injections from the Treasury Department, fell back. Energy shares dropped after oil fell by nearly $1 to $63.22 a barrel, the lowest price in 18 months. Twenty-seven of the Dow 30 declined.  Analysts hoped that the sell-off did not reflect widespread sentiment, noting that many investors kept their cash out of the market on Monday as they awaited an important week of news on the financial front. Federal Reserve policy makers convene on Tuesday for a two-day meeting that will culminate in an interest rate decision Wednesday afternoon. Investors are betting that the Fed will lower rates.  On Thursday, the government will release its first estimate for economic growth from July to September, a number that many expect will be negative.  On Tuesday the Case-Shiller home price index will be issued, a closely watched report on the state of the housing market. Its condition is considered crucial to the revival of the American economy.  Some of that tension was momentarily eased by a Commerce Department report on sales of newly constructed homes, which rose 2.7 percent in September, rising to an annual rate of 464,000. The rise was more than economists had expected. All of the gains came in Southern and Western states.  The supply of new homes on the market also fell from August, but economists warned that prices would have to drop further before inventories could be significantly improved.  “The supply of homes for sale is declining rapidly due to the combination of aggressive construction cutbacks and a pickup in sales prompted by price reductions,” Mike Larson, a real estate analyst at Weiss Research, wrote. But he warned that the credit problems stemming from the financial crisis could have a chilling effect on the market in the near future.  The sell-off continued in early trading Tuesday in most Asian markets. After falling 6.4 percent to its lowest level since October 1982 on Monday, the Nikkei index in Tokyo was down another percentage point on Tuesday.  Hong Kong’s Hang Seng index, which lost more than 12 percent on Monday, rebounded and was up about 3 percent Tuesday.  Stocks in Europe finished lower on Monday but pared early losses. The FTSE 100 index in London lost 0.8 percent; the CAC 40 in Paris was down 3.9 percent; and the DAX in Frankfurt rose 0.9 percent.  Borrowing rates among banks fell over the weekend. The Fed also began its new program to purchase commercial paper, one of the central bank’s efforts to unlock the flow of credit. The Fed said it would charge relatively low rates to buy what amount to short-term i.o.u.’s used by businesses and banks. The actions are intended to add liquidity to a market that had been nearly frozen in the last few weeks.  The Treasury’s benchmark 10-year bill fell 1/32, to 102-17/32, and the yield was at 3.69 percent, unchanged from late Friday.  Carter Dougherty and David Jolly contributed reporting.  A version of this article appears in print on , on Page B10 of the New York edition with the headline: Sense of Calm Is Swept Away in the Final Minutes. Order Reprints| Today's Paper|Subscribe
As the day ended, the Dow industrials were down about 200 points after trading in a nearly 400-point range.