Wall Street retreated in an erratic session Thursday as the latest round of economic data intensified investors' fears that the economy is falling into a recession. The Dow Jones industrial average fell about 150 points.
Investors were looking for data that would be upbeat enough to stave off a sharp economic slowdown, but not get in the way of further interest rate cuts. They were disappointed when a report from the Philadelphia Federal Reserve showed manufacturing fell more than forecast. Meanwhile, the Conference Board's gauge of leading economic indicators for January, used to predict which direction the economy is headed, posted its fourth straight drop.
Traders are already pricing in another interest rate cut — perhaps up to half a percentage point — after minutes from the Federal Reserve's last policy-setting meeting indicated central bankers will remain vigilant about the economy.