The economy has sunk deeper into more economic problems from credit and financial crises as the Down Jones industrial dropped as much as 733 points on worries over retail sales. The government's report that retail sales plunged in September by 1.2 percent, almost double the 0.7 percent drop analysts expected. Consumers are reluctant to spend money currently due to bad market and economy.

Retailers are hoping for green Christmas, but in fact it will be different this year. Spending all across from online, car sales, furniture, electronic good, sporting and others were all down.

Consumers are indicating that they will be tighter on spending which would lead to flat to declining sales. Given this, retailers foresee a "weaker economic outlook, including a slow holiday season," the Fed said.

Federal Reserve Chairman Ben warned in a speech Wednesday that patching up the credit markets won't provide an instantaneous jolt to the economy.

Analysts have warned that market will continue to see volatility as it tries to recover. Investors came to believe that government's $250 billion plan was based on too much optimism about the country's problems.

The stock market is struggling to recover from last week's terrible run, which erased about $2.4 trillion in shareholder wealth and brought the Dow to its lowest level since April 2003. Credit market has been showing some recovery but still remains nervous as demand for safe assets remains high.

Economic activity weakened across the United States in September in all twelve Federal Reserve Districts. In a speech to the Economic Club of New York, Bernanke said it will take some time to restore normal flows of credit and he pledged the U.S. central bank would continue to act aggressively to fight the crisis.

Fed might be pressured to cut rates again as some analysts believe by a quarter or half point.  Others say the Fed won't cut rates again, unless it absolutely has too. Another wild card is the presidential election on Nov. 4, just days after the FOMC's policy meeting and the release of third-quarter GDP.

Oil prices dipped below $75 a barrel Wednesday, a new 13-month low, as OPEC reduced its 2009 petroleum demand forecast. Light, sweet crude for November delivery fell $2.95 to $75.68 a barrel on the New York Mercantile Exchange.

That left pumps lower their prices, according to AAA prices has dropped to a new national average of $3.125. Economic slowdown is forcing consumers to cut back on expenses and energy use.  Recession might be looming and expectation about crude prices might still have some way until they bottom out.  Many traders suggest $50 a barrel might be the right price.

From the realty check many lenders are holding off on modifying or restructuring loans, thinking they might get a better deal from the bailout. On top of that banks are holding off on selling foreclosed homes or doing short sales. The Fed's trying to create liquidity everywhere, but somehow not into mortgages.