Stocks Down Sharply On Slowdown Fears

Stocks are sharply lower today on weak retail sales news and continued pressures in the credit markets. This morning, data showed that September retail sales were down 1.2%. This was much worse than expected and the largest drop in three years. Investors' moods were sour on concerns the credit crisis is reaching the real economy and a severe recession in likely unavoidable despite unprecedented government action.

At 2:05PM ET the Dow was down 546, the Nasdaq was down 110 and the S&P 500 was down 70.

In a speech at the Economic Club of New York, Federal Reserve Chairman Ben Bernanke said the credit markets will take time to unfreeze and a broader economic recovery will not happen right away, but Bernanke did hint at future rate cuts.

The Fed's Beige Book reported that economic activity weakened in September across all twelve Federal Reserve Districts. Several Districts also noted that their contacts had become more pessimistic about the economic outlook.

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