Stocks Slammed As Cracks In The Economy Start Showing Up

Stocks were sharply lower again today, dropping the most since the 1987 crash, as cracks in the real economy from the credit crisis started showing up with a weak retail sales number. 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.

The Dow fell 733 points, or 7.9%; the Nasdaq sank 151 points, or 8.5%; and the S&P 500 was down 90 points, or 9%.

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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