After two days of paralysis, the stock market plunged today as Wall Street stopped debating which direction stock prices should go and turned to discussing which factors are driving stocks lower.
Higher interest rates ranked number one on Wall Street's list of worries, but there were other negatives as well: the increasingly ugly situation in Iraq, soaring energy prices and today's data on unemployment applications and retail sales.
Throw in the unanswerable question of what Friday's Labor Department unemployment report will reveal about the job market and traders had no trouble finding reasons for selling stocks.
And if those immediate problems weren't discouraging enough, along came Federal Reserve Chairman Alan Greenspan with a lecture on the long-term threat to the economy posed by out-of-control government budget deficits.
The menu of malaise drove the Dow Jones industrial average down by 70 points to 10,241.26.
The Nasdaq Stock Market composite index fell 20 points to 1,937.74.
The Standard & Poor's 500 stock index dropped nearly 8 points to 1,113.99.
The results could have been worse. Late in the session bargain hunters stepped in and brought the market back from the triple digit losses that prevailed at mid-day.
Reports from Wall Street blamed fear of higher interest rates for today's broad decline. That analysis only hinted at why the market reacted so negatively today -- two days after the Fed made clear that rates will be going up later this year.
The probability that rates will rise soon seemed to increase as the result of the weekly count of people lining up to apply for jobless benefits. The tally fell to 315,000 -- the lowest since October, 2000.
The drop in applications for unemployment compensation was taken as a clue to what Friday's jobs report will bring. Economists surveyed by Bloomberg are predicting that 170,000 new jobs were created in April, which would be very healthy job growth.
While generating new jobs is good for the economy, robust growth would prompt the Fed to raise rates sooner rather than later. So, perversely, a strong jobs report might drive stocks even lower.
But betting on the unemployment report is considered a high-risk venture, even by Wall Street's standards, so the tactic today was simply to stay on the sidelines.