WALL St's record stock plunge saw approximately $US1.2 trillion one-day loss, according to the Dow Jones Wilshire 5000, the broadest measure of market activity.

The biggest-ever loss is almost double the size of the rescue package rejected by the US House of Representatives earlier Monday.

Markets around the world panicked after lawmakers voted down the $US700 billion bailout for the financial system, raising the prospect of deeper financial turmoil.

The Dow Jones Industrial Average sank 777.68 points (6.98 per cent) to close at 10,365.45, in its biggest single-day point decline ever.