NEW YORK - WALL Street shares skidded into a ditch on Monday after the government warned General Motors and Chrysler could face bankruptcy and banks could need more aid, stoking fears about the US economy.

The Dow Jones Industrial Average plunged 254.16 points (3.27 per cent) to 7,522.02 at the market close.

WASHINGTON - SALES of vacation and investment homes slid 22 per cent last year, a sign that tough economic conditions and tight lending requirements shut out buyers, the National Association of Realtors reported on Monday.

Second home sales comprised 30 per cent of the entire housing market, down from a peak of 40 per cent in 2005 when financing was easier.

DETROIT - CHRYSLER has reached an agreement on a framework of a global alliance with Italian automaker Fiat CEO Bob Nardelli said on Monday.

'We appreciate the willingness of the (autos) Task Force, along with industry and financial experts, to consult closely with us in order to achieve this significant step,' Mr Nardelli said in a statement.