Mid-Day Recap: Weak Data, Bernanke Testimony Spur Nosedive in Stocks

Stocks are once again tumbling as talk of increased regulation is underway on Capital Hill. Fresh data on the nation’s manufacturing sector didn’t help either as it came in below market forecasts.

As of 1:10 pm, the S&P 500 is down a whopping 2.01% on the day, or 21 points lower at 1,035. The Dow had shed 160 points, or 1.65%, to 9,552. Not to be outdone, the Nasdaq is trading 2.50% lower, or 53 points down, at 2,069. 

Early this morning Ben Bernanke, chairman of the Federal Reserve, told a congressional panel that an oversight council created by various regulatory should be established. 

The new council, and not the Fed, would “monitor and identify emerging risks to financial stability across the entire financial system,” “identify regulatory gaps,” and “coordinate the agencies' responses to potential systemic risks,” he said.

“We should seek to marshal the collective expertise and information of all financial supervisors to identify and respond to developments that threaten the stability of the system as a whole,” Bernanke told the House Committee on Financial Services.

The chairman’s testimony is line with his earlier calls for what he termed “macroprudential” oversight. But, critics will be pleased that he is calling for a new council rather than for the Fed to assume greater power.

Data Recap:

The day began on a soft note with poor results from the weekly jobless claims report.

Forecasters were expecting 537k claims. The weekly figures can be volatile so it’s no real surprise, only disappointment that another downward surprise was not in store. The prior week’s level, revised up 4k to 534k, was the lowest since early July.

The good news was that continuing claims â€