NEW YORK, Sept 6: After ups and downs and mixed economic messages, Wall Street is now retrenching on renewed fears that the US economy is sinking fast and seems likely to enter a recession, analysts say.

The latest data including Friday’s grim unemployment report appear to have settled debate about where the economy is headed, dashing hopes for a quick rebound in the United States even as conditions slow in Europe and elsewhere.

If there was any lingering doubt, yep, it’s a recession, and the fourth quarter is shaping up to be an ugly quarter, said economist Scott Anderson at Wells Fargo Economics.

You could almost hear the bulls on Wall Street throwing themselves on their swords over the past five trading days. The payroll report should end the debate that the economy is doing well. Dina Cover, economist at TD Bank Financial Group said the dismal US economic data had a disheartening effect on stock markets. She added: The eight-month string of job losses reaffirms that US consumers have quite a bumpy road ahead, which does not bode well for economic growth in the coming quarters.”In the holiday-shortened week to Friday, the blue-chip Dow Jones Industrial Average slumped 2.8 per cent to end at 11,220.96.

The broad-market Standard & Poor’s 500 index lost 3.16 per cent to 1,242.31 and the technology-heavy Nasdaq composite retreated a whopping 4.2 per cent to 2,255.88.

Over the past week, data showed the US unemployment rate spiked to a five-year high of 6.1 per cent in August with 84,000 jobs lost. Auto sales were down sharply from last year’s levels, raising fears about consumer spending and the factory sector.

These reports dampened hopes for a recovery that had been fueled by data showing a robust 3.3 per cent growth rate in US gross domestic product in the second quarter -- a report greeted skeptically by some who said it was distorted by one-time factors.

The latest data on the labor market confirms that the improvement in GDP growth to 3.3 per cent in the second quarter was just a head-fake, said Nigel Gault, economist at Global Insight.

The coming week holds some promise, at least in terms of economic data that may be easier to swallow, according to Gault.

Retail sales are expected to show a 0.6 per cent rise for the month, led by motor vehicle sales, according to Global Insight.

Although car sales were down 15.5 per cent from a year ago based on automaker reports, they rose from depressed levels in July, offering some hope for an economic lift.

On Wall Street, we suspect investors are becoming very nervous as news of the economic slowdown in the important European market continues to surface, said Fred Dickson at DA Davidson & Co.—AFP