UPDATE: US Stocks Plunge As Recession Fears Drive Worst Loss Since Financial Crisis – WSJ.com.
“The concern is that you’re seeing visible worry by government officials, by central bankers. The [worry] is, ‘Are there any bullets left in the government arsenal to help’?” said Russ Koesterich, iShares Global Chief Investment Strategist at BlackRock. “Investors are realizing that the economy is very fragile, [but] it’s not clear that governments are able to do much help.”
In his press conference, ECB President Jean-Claude Trichet acknowledged downside risks to growth in the region, saying economic risks “may have intensified,” and that recent data showed the growth pace in Europe has decelerated.
The ECB left key interest rates unchanged. Trichet’s comments on the weakening economic recovery prompted the central bank to resume its program of government bond buying for the first time in five months. But traders said the central bank was only buying Portuguese and Irish sovereign bonds, a decision that Trichet acknowledged was not “unanimous.”