Stocks ended a volatile session in the red on Tuesday, despite a sharp drop in oil prices, after economic policy makers issued dour predictions and skepticism arose about the government’s efforts to shore up the nation’s financial sector.

The Dow Jones industrial average ended below 11,000 for the first time in two years, and the broader Standard & Poor’s 500-stock index declined 1.1 percent.

Fannie Mae and Freddie Mac, the beleaguered mortgage finance giants, fell for the fifth day in a row, despite attempts by President Bush and Treasury Secretary Henry M. Paulson Jr. to reassure investors about the government’s rescue plan for the companies. Freddie Mac shares lost 26 percent, and Fannie Mae ended down 27 percent.

Battered bank stocks also closed mostly in the red, although Lehman Brothers managed a 7 percent gain.