Wall Street plunged again Wednesday with the Dow Jones average dropping more than 160 points on credit crunch despite the Federal Reserve added more cash to the banking system.

The Dow Jones industrial average declined 167.45 points to settle at 12861.47, the first time below the 13,000 benchmark since April 24.

The S&P 500 index dropped 19.84, or 1.39 percent, to 1,406.70, and the Nasdaq composite index lost 40.29, or 1.61 percent, to 2, 458.83.

The sell-off was triggered by rumors that the U.S. largest mortgage lender Countrywide Financial Corp. has been unable to raise money from the commercial paper market. Shares of Countrywide declined 14.64 percent.

On Wednesday, the Federal Reserve injected 7 billion dollars to the markets to boost liquidity in the financial system but failed to quash investors' jitters about problems in lending.