Stock markets tumbled yesterday as the rally that has sent equities surging for most of this month ground to a halt amid a jolt of worry over General Motors and Chrysler.

Investors feared the automakers may be forced into bankruptcy after the U.S. government said the plans they’ve submitted are not acceptable.

Financial stocks slumped in Toronto, joined by energy and base-metal shares, as the price of crude oil fell almost $4 US a barrel.

The S&P/TSX composite index dropped as much as 368 points but the retreat moderated in the final minutes and the index closed with a loss of 224.84 points or 2.6 per cent at 8,596.22.

This followed a gain of more than 16 per cent over the course of the rally that took off March 10.

New York’s Dow Jones industrial average fell 254.16 points to 7,522.02, after the index had surged 20 per cent in the March runup.

General Motors shares plunged 25 per cent to $2.70 US in New York, and Canadian auto parts makers were down sharply in Toronto. Magna International fell $1.36 to $33.52.

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