Monday, the Dow closed down 239.50 at 8,073.63, while the Nasdaq wound up off 41.91 at 1,206.01, and the S&P 500 lost 29.64 to close at 834.60.
Today, the Nikkei fell for the fifth day in a row, ending at a six month low as Sharp Corp. and other blue-chip tech stocks were beaten down again in line with the fortunes of their U.S. peers.
The Nikkei slipped 2.10 percent, losing 203.91 points to close at 9,501.02. In London, the trend stayed true, as the FTSE 100 slumped over two percent in early trading.
On Wall Street, the combination of three successive triple-digit selloffs on the Dow, as well as economic data suggesting that the economy is slowing, has many concerned that stocks have farther yet to fall.
"It wouldn't surprise me if we retested the lows," said Larry Wachtel, a market analyst at Prudential Securities. "The question is if we're going to be able to bounce back or fall even more. The tone is certainly negative enough."
Indeed, in the past three sessions - Thursday, Friday and Monday - the Dow has given up roughly two-thirds of the huge rally it had between July 24 and July 29, following its decline to 7,702.34 nearly two weeks ago.
The average, now only a few hundred points from that low, also is back below its lowest close following the Sept. 11 attacks for the first time in more than a week. The Nasdaq composite index is at a new 5-year low.
The selling has been prompted by a spate of economic disappointments over the past few trading sessions - ranging from falloffs in construction spending, business activity and gross domestic product to uninspiring job figures.
Wall Street's reaction was so negative because the economy's health had been taken for granted. The figures suggest that not only is the economy not recovering as quickly as hoped but that it may actually be worsening - raising the possibility that the country will fall back into recession.
"The perception is we're going to double-dip, fall into recession and it's going to be horrible," said Tim Leach, the chief investment officer for Wells Fargo's Private Client Services. "People are so beat up after two-and-half years of selling that there is a much greater believability in negative news than in positive news. So people are starting to think that maybe the market was right not to rally."
At the same time, overseas pressures have intensified. Fighting has stepped up in the Middle East, and talk is increasing about U.S. action against Iraq.
There also is concern about the financial situation of countries in Latin America. The U.S. Federal Reserve's decision to send Uruguay $1.5 billion to help its ailing financial system raises the possibility of more bailouts. Brazil reportedly is seeking about $10 billion in similar assistance. A collapse of any of those economies could have significant implications for U.S. companies that have investments there.
All the uncertainty, analysts say, gives already wary investors few reasons to think the stock market is going to go higher anytime soon. With the market seemingly unable to hold a gain, many would-be buyers are staying away - or limiting the amount of money they leave in the market.
"Investors, both large and small, have had their confidence crushed and there are a lot of people who've never seen the market behave this way," said Michael Murphy, the head trader at Wachovia Securities.