Once more, gloom is descending over Wall Street.

After rallying for a few hopeful months this spring, the stock market is sinking to its lowest level in years. Cracks are reappearing in the credit markets. The price of oil is rising from one record to another. And the analysts who seemed so confident a few weeks ago are predicting another round of steep losses at big financial companies like Citigroup.

On Thursday, the Dow Jones industrial average tumbled 358 points, its steepest decline in nearly three weeks. The blue-chip index closed at 11,453.42, its lowest since September 2006. One longtime member of the Dow industrials, the General Motors Corporation, plunged to its lowest since 1974.

Downgrades in the financial industry and fear over the deteriorating health of the auto sector were the immediate causes of Thursday’s sell-off. But the abrupt reversal in the markets  only five weeks ago the Dow was flying above 13,000  reflects the realization among investors that the troubles plaguing the economy may be worse than initially feared.

While many regarded the Bear Stearns implosion in March as the moment of maximum pessimism in the financial markets, some analysts say bigger problems now lie ahead for the broader economy.