US stocks fell sharply on Thursday sending the Dow Jones Industrial Average to a six-year low. The decline was primarily triggered by financial shares which sank to the lowest level since 1995 on concern over increasing credit card defaults.

Stocks of Bank of America Corp and Citigroup Inc slid 14% each thus driving the Dow Jones down by 89.68 points or 1.2%. The Dow finally closed at 7465.95 it’s lowest since October 2002. Among other financial stocks to go into a downward spin was Prudential Financial Inc which fell 16% after it failed to qualify for borrowing under a government plan due to a credit-rating downgrade.

Technology stocks did not fare any better either. Stocks of Hewlett-Packard, the global leader in manufacture of personal computers, fell 7.9 percent after the company cut its earnings forecast amid declining sale of personal computers and printers all over the world. The slump in HP and other technology companies led the retreat of Standard & Poor 500 Index which slid by 1.8% to 778.94. The Russell 2000 Index too saw a decline, falling by 1.5%

The fall in US stocks comes in the wake of a dismal forecast by the Federal Reserve which warned that the economy will continue to flounder for the rest of 2009. Government reports also revealed that industrial production had contracted more than previously estimated.