Today, about an hour before the start of trading, the Dow Jones Industrial Average futures dropped 221 points to 11730. S&P 500 futures sank 33.8 to 1275.5, and Nasdaq 100 futures skidded 64 to 1737. Changes in the volatile and lightly traded index futures don't always accurately predict market moves after the opening bell.
On Tuesday futures had hinted at a plunge in the Dow industrials of more than 500 points following a violent two-day sell-off in overseas stock markets, but stocks ended only moderately lower after the Federal Reserve stepped in with a cut of three quarters of a percentage point in its target for the federal-funds rate. The Dow Jones Industrials ended the volatile session down 128 points, the Nasdaq Composite dropped 47 points and the S&P 500 fell 14 points.
Despite the efforts of policy makers to provide quick fiscal and monetary relief investors and analysts are worried that the economy may slam into reverse. A potentially "severe" U.S. recession is on tap, said Nouriel Roubini, chairman of consulting firm Roubini Global Economics, at the Davos Economic Forum.
Mr. Roubini was the only member of last year's World Economic Forum panel to predict a significant U.S. downturn as a result of what he called the "three bears" -- a credit crunch, a bursting housing bubble, and soaring energy prices.