THE ECONOMY: Headed for a Hard Landing?

Headed for a Hard Landing?

Until last week, most stock-market investors were confident that the U.S. economy was not headed for a recession anytime soon. A slowdown, when it came, was expected to be gradual -- a soft landing, in the economic argot. Last week that sentiment abruptly shifted as investors became fearful of a bumpier end to the nearly seven-year stretch of economic expansion. Their fit of pessimism gave the stock market its worst week in more than 15 months. The Dow Jones average fell 91.81 points, closing the week at 2440.06.

The sell-off was sparked by a Commerce Department report that the index of...

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