Jobs are hard to come by, debt problems are hobbling several European countries and oil is spreading across the Gulf of Mexico. With news like that, it's hard to see how the stock market can pull out of its slump.
Many traders expect the market to keep falling, especially with no obvious catalysts to stop its six-week slide. But some pros predict that stocks will end the year higher.
Here's what could make the market stabilize and turn around:
Traders should get an initial sense in the coming months of whether cost cuts by Europe's debt-strapped governments will, as many investors fear, slow the global economic rebound. They'll also get a better idea of what the financial overhaul bill being finalized in Congress will mean for bank profits.
The market should have a sense of the economic fallout from the oil spill. And investors will be getting more economic numbers to determine whether the U.S. recovery is continuing.
Still, a comeback won't be easy, as Friday's stock plunge showed. The Dow Jones industrials fell 323 points to a four-month low after the government's May jobs report missed expectations and more questions arose about Europe. The Dow is now down 11.4 percent from its 2010 peak of 11,205, which it reached April 26. That means it's back in a "correction," a drop of more than 10 percent from a recent high.
Many analysts predict that trading will remain choppy while investors wait for answers about the economy. Here is what some are saying:
Chief economist at Wells Fargo Securities in Charlotte, N.C.
What he expects: Silvia predicts the benchmark Standard & Poor's 500 index to climb about 3 percent to 5 percent by year-end. Based on where the market stood before Friday's swoon, that would put the S&P 500 at about 1,136 to 1,158. That's still 5 percent to 7 percent below its 2010 high. On Friday, it ended at 1,065.
What he sees: Silvia dismisses some of the more pessimistic forecasts that a weak job market and spending cuts in Europe will short-circuit a global recovery and push the economy down again. "No way. This is not consistent with a 'double-dip'" recession," he said.
Silvia said Europe's problems will be an obstacle for American companies that do business there. But a weaker Europe won't destroy U.S. companies' profits, as some traders have feared.
"Everything is moving in the right direction. It's just not moving as fast as they want to see," he said. "They want black and white and you've got gray."
Chief economist at J.P. Morgan Private Wealth Management in New York.
What he expects: A gain of 6 percent to 9 percent in the S&P 500 by year-end. Excluding Friday's drop, that would put it at 1,182 to 1,215.
What he sees: "It will be choppy for a good part of the year until we get more clarity on the European situation," he said. "That's the major thing that is holding us back because if you look at the U.S. fundamentals, they don't really look that far out of hand."
Chan said the U.S. economic numbers still look promising. He noted that while Friday's jobs report said that hiring by private employers slowed, the average hours worked in a week and average hourly earnings both rose. That should boost consumer spending.
"If you're comparing this report to expectations, it was not good," he said. But Chan said the numbers indicate "in capital letters" that the economy is still improving.
Chief investment officer at McQueen, Ball & Associates in Bethlehem, Pa.
What he expects: The S&P at 1,000 to 1,100 by year-end.
What he sees: Schultz said the market would need "more substantial" disappointing news to go much lower. "We've factored in a decent portion of the bad news," he said. "People are holding on to the edge of their seats because they hope it doesn't get worse, but they certainly have that fear at the back of their minds."
But he also said it will be hard for the market to go much higher because traders are uneasy about the end of the government spending that has supported the economy since the 2008 financial crisis. And the massive debt that has funded that spending.
"2011 is going to have to see some payback as far as the disappearance of the stimulus and the increase in the debt load that the country is going to be facing," Schultz said.