NEW YORK (AP) -- Stocks fell sharply today on a growing conviction that the U.S. is headed toward recession.
The Dow Jones industrial average finished with a loss of 277 points at 12,501. Declining issues on the New York Stock Exchange led gainers nearly 3-to-1 on volume of about 4.3 billion shares. The Nasdaq composite index was down more than 60 points at the 2,417 level, with roughly 2.3 billion shares traded. And the S&P 500 dropped 35 points, closing at 1,381.
Reluctance by consumers to spend, as evidenced by news that retail sales fell last month, has Wall Street fretting about an economic downturn. Spending by consumers, which accounts for more than two-thirds of economic activity, has been key to averting economic slowdowns in recent years.
In addition, there is the feeling among some that the Federal Reserve hasn't done enough to keep the economy going -- especially as investors continue to see the fallout from the summer's subprime mortgage mess. Citigroup has announced a massive 18.1 billion dollar write-down for bad mortgage assets and slashed its dividend.