Obama Jobs Package Fails To Lift Spirits, Stock Market Plunges

Just another speech:

Deep skepticism about Congress passing President Barack Obama’s $447 billion jobs package and fears that Greece could slip into default sparked a severe stock market selloff on Friday.


The Dow Jones Industrial Average closed down 304 points, or 2.69 percent, a reminder of how dangerously fragile the situation is despite government initiatives worldwide to stabilize the economy and fuel growth.


“There is only so much we can withstand before we move into a recession,” said Mesirow Financial chief economist Diane Swonk.


Europe had primarily caused the downturn, Swonk said, although political gridlock and reports of a possible terror attack on the 10th anniversary of 9/11 on Sunday also weighed heavily on traders Friday.


German officials said Chancellor Angela Merkel’s government is putting together a strategy for supporting banks in the event Greece defaults, according to Bloomberg News. A default could ignite a further selloff that would bite into the revenues and profits of American companies with European operations, a shock that could possibly pull the stalled U.S. economy into a full-blown recession.

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