Bear In Mind

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NEW YORK: After a fifth straight day on the slippery slope, the Dow Jones Industrial Average stands at 6,477.35, down 8.6 percent from its 7,085.16 high of March 11. It's not a bear market yet. But it doesn't look good. "I think we're in trouble," says TIME's Daniel Kadlec. "Usually during a downturn, people are tempted to buy, but this time they're afraid to step up." Right now, the reason for that fear is Friday's employment report. An unexpectedly high number, enough to spur Alan Greenspan to raise interest rates again, could send the markets reeling anew. "Greenspan surprised a lot of people when he raised rates the first time," on March 25, says Kadlec. "Now he's got them thinking that he's ready to raise them not just in May but two or three times after that." And, he says, "There's every indication that Friday's numbers will be very, very strong." To be considered a correction, the market typically has to lose 10 percent, in this case the Dow dipping to below 6400. That hasn't happened since 1990, the longest such stretch ever. Along with interest-rate fears, Kadlec says, are growing worries that reports on first-quarter corporate profits will be weak. Those will be out in a few weeks. Seeing such a string of potholes on the road ahead makes Kadlec think Wall Street could be headed for a bearish spring. "Even going beyond the Dow, half of all stocks are down at least 20 percent from their highs for the year. That reveals a lot more damage than even the Dow is showing."