NEW YORK (CNNMoney.com) -- U.S. stocks plunged at the start of trading Tuesday, with investors ignoring the Federal Reserve's emergency rate cut to join the global selloff on recession fears.

The Dow Jones industrial average lost more than 400 points. The Nasdaq composite index fell 5 percent. The Standard & Poor's 500 index lost 3.5 percent.

The Fed cut rates by three-quarters of a percentage point to 3.5 percent, citing the weakening economic outlook. The move came ahead of the central bank's regularly scheduled meting.

As a recession looms, President Bush and lawmakers from both parties are due to meet Tuesday to discuss a package to juice the faltering economy. Last week, Bush unveiled a stimulus plan worth up to $150 billion.

Treasury Secretary Henry Paulson said Tuesday that Congress and the White House need to act quickly on a package of tax cuts and other measures to boost the economy.

Among stocks to watch, financial stocks are likely to take another hit after Bank of America (BAC, Fortune 500) and Wachovia (WB, Fortune 500) both posted dismal results due to the mortgage and credit mess.

Bank of America's net income sank 95 percent to $268 million in the fourth quarter as the company took $5.3 billion in writedowns related to complex debt instruments. Wachovia's quarterly earnings sank 98 percent to $51 million, and the company took a $1.7 billion writedown.