CHICAGO — The advice from financial experts has been painfully repetitive during weeks of decline in the markets: A bottom should be near. History says stocks always bounce back. Don't sell now and miss the recovery.
But when panic selling washed over the markets again Friday, sending the Dow Jones industrial average down as much as 6 percent at one point, the pundits and money managers sounded less certain than ever about what comes next.
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"There's a debate right now, is the next major milestone in the Dow 5,000 or 10,000?" said Art Hogan, chief market strategist at Jefferies & Co. "I think compelling arguments can be made on both sides."
Many financial professionals, Hogan included, think the bad news is largely reflected in current stock prices: a global economic slowdown, a residential real estate recession, the credit market crunch and poor corporate earnings.
It already seemed that way when the Dow Jones industrial average plummeted 27 percent in the first eight trading days of this month to a 5½ -year low of 7,882 during the session on Oct. 10.
But investor emotions remain a wild card in a shaky global economy. After climbing back near the 10,000 mark briefly last week, the Dow is sliding again and finished down 4 percent Friday at 8,379. As the market opened, the potential loss was feared to be much greater after some international markets were hammered by double-digit declines.
U.S. market analysts were at as much of a loss to estimate how much further the descent might go as they were to explain the latest drop.
"It just is something we haven't seen in our lifetimes, so it's hard to tell exactly where we are," said Tom Forester, portfolio manager for the Forester Value Fund in Chicago.
"This seems more like panic selling than fundamentally based," he said. But if the financial system remains troubled and every-day loans are tougher to get, he said, "then who knows? Maybe panic's the right move."
Investors' fear is in evidence not just in the markets but in the faces of those who have lost tens or hundreds of thousands of dollars in their retirement and other accounts this fall.
"Anxiety is running overtime," according to Dr. Stephan Quentzel, chief of primary care psychiatry at Beth Israel Medical Center in New York.
The steady stock decline makes people feel more emotionally vulnerable and increasingly prone to bad market moves — usually ill-timed decisions to sell — to try to regain a sense of financial security, he said.
The tension shows in other forms, too.
Across from the New York Stock Exchange, artist Geoffrey Raymond set up a giant canvas Friday featuring the face of former Federal Reserve Chairman Alan Greenspan and invited passersby to write their own messages on the painting.
One person wrote simply, "Greenspan is the devil." Another wrote: "When things go too well, someone should get nervous." Still another: "You've got to know when to fold."