The stock market suffered its worst loss in almost six months today after new data renewed fears that economic growth is being hobbled by hurricanes and their aftermath.
For the second day in a row, stocks were knocked down by a report from the Institute for Supply Management, an industry group that takes the economic pulse of its members every month.
On Tuesday the ISM's assessment of manufacturing companies took the market down, today it was a report on the rest of the economy -- "the service sector" as economists call it.
With thousands of companies shut down by storms, September growth for services companies was the slowest in two years, ISM found.
Reinforcing the worries raised by that report were developments in the energy markets, where crude oil touched a two-month low after reports that U.S. gasoline consumption is falling rapidly.
While the drop in driving and gas usage takes pressure off prices at the pump, some economists see it as an ominous signal of a broad slowdown in the economy resulting from record energy costs.
How badly Rita, Katrina and the record energy prices they produced are hurting the economy may become clearer Thursday, when the big retail chains report their September sales.
The sales figures are bound to be bad. Wal-Mart, for example, had more than 120 stores shuttered by the storms -- a handful of them still closed.
Retail experts will try to factor Louisiana and Mississippi out of Thursday's sales figures to get an idea of how consumers in the rest of the country are reacting.
Interest-rate anxieties also hurt the market today. After three Federal Reserve officials gave talks Tuesday stressing the importance of raising rates to fight inflation, Wall Street got the message. This morning Citigroup, which had been predicting the Fed would raise short-term rates from their present 3.75 percent to 4.5 percent, boosted its forecast to 5 percent.
Add the Fed's interest rate hikes to the soaring cost of fuels and Americans are looking at a double whammy that could hurt business profits and consumer spending, Wall Street fears.
Today's early decline developed into a serious sell-off by the end of the day.
The Dow Jones industrial index fell 124 points to 10,317.36.
The Nasdaq Stock Market composite index plunged 36 points to 2,103.02.
The Standard & Poor's 500 stock index dropped 18 points to 1,196.39.
It was the worst daily loss since April 15 for the S&P and Nasdaq Composite, the worst since July 8 for the Dow.
Bloomberg News pointed out that the breadth of the retreat was even worse than its depth. On the New York Stock Exchange, 10 stocks fell for every one that rose and trading volume was 29 percent higher than the average for the past three months.