NEW YORK, March 8: With economic news getting bleaker by the day and worries growing about credit markets seizing up, Wall Street investors have been scurrying for cover.

The main US indexes have hit their lowest levels in a year and a half as fears about recession have risen and consumers and business are battening down the hatches to ride out an expected economic storm.

The Dow Jones Industrial Average tumbled 3.04 per cent for the week to close Friday at 11,893.69, its worst level since October 2006.

The tech-heavy Nasdaq composite slid 2.59 per cent to 2,212.49 while the broad-market Standard & Poor’s 500 index retreated 2.80 per cent to 1,293.37.

The market wallowed in losses as any doubts about a deep crisis in the world’s biggest economy were erased by data in the past week. The key was Friday’s report showing a loss of 63,000 jobs in February, signaling a sharp deceleration in economic momentum.

Even the White House was unable to put a favourable spin on the news.President George W. Bush’s top economic adviser, Ed Lazear, did not rule out shrinking economic activity for the current quarter.

This quarter will probably be our weakest quarter ... Whether you call that ‘a recession’ or not is something that we won’t know for many months. Most private economists said the writing was on the wall.

Ethan Harris, economist at Lehman Brothers, said the Federal Reserve’s interest rate cuts and 168-billion-dollar economic stimulus passed by Congress will be too late to avert a recession.

While we are penciling in a very mild recession, it is important to not get hung up on the ‘recession, no recession’ debate, he said. The more fundamental point is that the economy is likely to experience an extended period of very weak growth, a rising unemployment rate and significant further Fed rate cuts.

The Fed stepped up efforts to shore up the banking system by boosting liquidity in direct credit auctions and repurchase agreements, moves that could pump $200 billion into markets. But some say that might not be enough to jump-start an ailing economy.

Five interest rate cuts by the Federal Reserve simply haven’t restored confidence to the credit markets, said Fred Dickson, market strategist at DA Davidson & Co. The retail sales report will reflect the perfect storm now lashing American consumers, said Sal Guatieri, economist at BMO Capital Markets, who added: The evidence for a US recession continues to mount by the day. Al Goldman at AG Edwards said the stock market may have already discounted the worst, and that a bounce is possible.—AFP