Stocks fell sharply on a variety of factors – from a pessimistic Federal Reserve to reports that Europe might be headed for a recession. But falling stocks don't guarantee a recession is coming.
At about noon Thursday, the Dow Jones Industrial Average was off 370 points, or 3.3 percent. On Wednesday, the Federal Reserve said 'there are significant downside risks to the economic outlook.'
Congress and the president may in part have wanted a deal on the debt ceiling out of concern for financial markets, but word of an agreement couldn't compete with a dismal July report.
The markets are counting on Washington to raise national debt ceiling by Aug. 2, but that's not all. Wall Street also expects a deal that cuts the size of US budget deficit. How much is it looking for?
Because of concerns about Greece, the US stock market has fallen about 7 percent, dropping for six weeks. Although it broke the losing streak last week, there is still uncertainty among investors.
Fed chief Bernanke avoids taking a position on taxes while telling Congress it must act 'in a timely manner' to reduce the deficit. Failing to raise the debt limit, he says, would be a costly mistake.
The Dow closed down more than 90 points after the Department of Labor released a discouraging jobs report on Friday
Unemployment increased to 9.1 percent in May, and only 54,000 new jobs were created. Economists point to lingering impacts of the tsunami plus rising food and gas prices.
The Dow rose about 38 points, with DuPont rising and Verizon falling. The Nasdaq rose about 15 points.
After Standard & Poor's downgraded its outlook on US debt Monday and sent stocks downward, stocks rose on Tuesday, with the Dow gaining about 65 points