Updated

Masked men attacked bars, banks and police stations with machine guns. Gangs set buses on fire. And inmates at dozens of prisons took guards hostage in an unprecedented four-day wave of violence around South America's largest city that left more than 80 dead by Monday.

President Luiz Inacio Lula da Silva prepared to send in 4,000 federal troops, and officials worried the violence could spread 220 miles northeast to Rio de Janeiro, where police were put on high alert and extra patrols were dispatched to slums where drug gang leaders live.

"What happened in Sao Paulo was a provocation, a show of force by organized crime," Silva said. He said the gangs' "tentacles are spread around the world and we must use a lot of intelligence" to quell the chaos their attacks caused.

• CountryWatch: Brazil

The violence was triggered by an attempt to isolate gang leaders, who control many of Sao Paulo's teeming, notoriously corrupt prisons, by transferring eight of them Thursday to a high-security facility hundreds of miles away from this city of 18 million people.

The leaders of the First Capital Command gang, or PCC, reportedly used cell phones to order the attacks. Gang members began riddling police cars with bullets, hurling grenades at police stations and attacking officers in their homes and afterwork hangouts.

Then, on Sunday night, the gang employed a new tactic: sending gunmen onto buses, ordering passengers and drivers off and torching the vehicles.

Thousands of drivers refused to work Monday, leaving an estimated 2.9 million people scrambling to find a way to their jobs. While most stores and businesses remained open, almost all shut early, creating one of the city's worst traffic jams ever as workers struggled in vain to get home.

Worried parents kept many children out of schools, and many businesses shut by 4 p.m. so workers could get home by dark. Sao Paulo's main stock exchange, the Bovespa, canceled after-hours trading to let investors and workers leave early.

Near hastily shuttered businesses in a blue-collar neighborhood, a dozen officers wielding shotguns, pistols and revolvers said they were not scared of overnight gang attacks.

"Everything's closing up, but we'll be here waiting," said a grim Officer Edvan Oliveira, his finger resting on the trigger of his shotgun. "We want them to come."

As two buses smoldered near his home in a working-class neighborhood, engineering student Julio Cesar said the violence left him with a choice of skipping classes and risking his future or going to his night college and fearing his family could get caught in the crossfire of evening attacks.

"Of course I'm scared to take the bus, because now they are targeting people and not just police," said Cesar, 19. "I'm also scared to leave because my mom lives here."

There was no mention of injuries in the nearly 50 reports of bus burnings.

But 21 new killings were reported Sunday night and Monday morning, the state government of Sao Paulo said, putting the death toll at 81 — 39 police officers and prison guards, 38 suspected gang members and four civilians caught in 181 attacks since Friday.

Prison officials said they do not know how many inmates have died in Sao Paulo's lockups because they were just retaking control of most of them. At least 91 people were arrested since Friday, police said.

Sao Paulo's Roman Catholic archbishop, Claudio Hummes, said the government had not done enough to stop the violence.

"Society cannot accept being held hostage by criminals," he said. "The state must improve the prison system to stop it from being a school for crime."

The governor of Sao Paulo state, Claudio Lembo, insisted that the federal troops offered by Silva were not needed.

"We are in control of the city and we will preserve this control," Lembo declared. "At this moment the army is unnecessary."

The violence also weighed on financial markets, helping to drive stocks down more than 2 percent as a perception took hold that Brazil is more risky than previously thought. The country's currency, the real, fell 2 percent against the U.S. dollar.

The PCC was founded in 1993 in Sao Paulo's Taubate Penitentiary and became involved in drug and arms trafficking, kidnappings, bank robberies and extortion.

It staged a massive prison uprising in 2001 in which 19 inmates died, and attacked more than 50 police stations in November 2003. Three officers and two suspected gang members were killed and 12 people injured in those attacks.

By Monday night, all 73 prison rebellions that broke out had been quelled and police pointed to a grim figure to push their claim that the situation would soon come back to something like normal. Mostly police officers and prison guards were killed Friday and Saturday nights — but the tally of dead in overnight violence from Sunday to Monday was almost exclusively suspected gang members killed in shootouts with police.

In Mato Grosso do Sul state, which borders Sao Paulo, three prison riots were brought under control.

Gilson Adei, 35, driving one of the few buses in downtown Sao Paulo, demanded authorities fight back against the criminals.

"It's absurd — the gang members can do whatever they want? They can just start a war? And why would they attack the transportation, normal people? Next it will be schools," he said. "We should get the military on every corner and kill them."