After the Dow closed below 10,000 Monday for the first time since 2004, a Penn State professor said a lack of confidence in the financial system is at least partially to blame.

Jean Helwege, associate professor in the department of finance, said part of the fallout seems to be an issue of confidence in the financial system.

"I think that part of the issue is that in order to get that bill passed the administration said a bunch of really, really negative things," Helwege said. "Then, when the bill finally did pass, there wasn't a whole lot of evidence that the world wasn't going to end."

Ryan Limor (senior-finance), president of the Penn State Investment Association, said Monday's losses in the Dow financials are significant.

"With the Dow dropping below 10,000 -- that's a huge psychological barrier for investors. The last time we saw these levels was October 2004," Limor said.

The U.S. government passed an unprecedented $700 billion financial bailout package Friday after two weeks of discussing the need for one. Monday, the Dow financials fell more than 800 points and rebounded to a loss of about 370 points.

"There's nothing obviously useful in the bailout bill. There's a lot of uncertainty," Helwege said. "That means you have lots of bad days. You'll also have lots of good days. Maybe that's just how it's going to go -- just a lot of ups and downs."

Limor said it may take a while to see real stability in the stock market.

"We're not sure how the bailout plan will work exactly. What we see is banks are still wary to lend to other banks," Limor said. "People are not sure if this is going to be the cure for this exactly and how long this might actually take to implement. It's going to take some time before we see something like that. That's what it looks like at least."

Patrick Creighton, communications director for Rep. John Peterson, R-Pa., said the bailout bill passed last week will help but the legislation has not had an effect on the market yet. Peterson voted in favor of the bill.

The issue is not limited to the United States, Creighton said, citing reaction in Europe.

"I think the problem is much bigger than here at home," he said.

The rest of the world experienced financial issues Monday even before Wall Street opened for trading. The Nikkei average in Japan lost more than 4 percent, the British FTSE-100 lost almost 6 percent, the DAX in Germany lost 7 percent and the CAC-40 in France lost more than 9 percent.

"Possibly what's going on in Europe is related to what's happening here," Helwege said. "Some of the strength in the rest of the world is contributing to what's happening here."

Helwege said the economy will not be incredibly strong again until the housing market gains strength.

"I find it annoying that Congress was talked into helping these financial firms and [has] done nothing on the housing market," Helwege said. "If you feel like this is so extreme, the housing market seems like a more sensible place to start."

Housing market troubles in the United States have made banks around the world fearful of lending to other banks, business and consumers.

Monday's stock drop was less than 8 percent at the worst point in the day and rebounded to losses of about 3.6 percent. The stock drops that came before the Great Depression were more than 20 percent.

"I find it very strange to be talking about the Great Depression when we're not even sure we're in a recession. Personally, I think we're in a recession," Helwege said. "The Great Depression is an order of magnitude that is well beyond what we're seeing here."

-- Collegian Staff Writer Mandy Hofmockel and the Associated Press contributed to this report.