Glum retail numbers this morning sent the markets and exchange traded funds (ETFs) into a tailspin, leading to the Dow Jones Industrial Average’s second-largest one-day point loss ever.
Investors are now bracing themselves for what could be an ugly recession, different from the brief and shallow downturns the United States has seen in the last two decades.
While some things have gotten better – credit conditions have improved slightly this week, with interbank lending rates dropping lower each day – there are other signs of trouble. Risk premiums on agency debt has widened to record levels, reports Peter A. McKay for the Wall Street Journal.
The markets weren’t helped by the Federal Reserve, which came out and said that the country has fallen deeper into an economic rut. The snapshot of business conditions showed weak activity in all of the Fed’s 12 regional districts, reports Jeannine Aversa for the Associated Press.