(Image source: Los Angeles Times)

BY GEORGE DUMONTIER

ANCHOR ALLIE SPILLYARDS

You're watching multisource business news analysis from Newsy.

After an eight day free fall, The Dow Jones industrial average finally saw a gain Wendesday--

“The Dow bounced back from a triple digit slide to close up about 30 points.”

But Thursday, it plummeted again-- down more than 500 points when it closed.

Bloomberg says some are fearing the worst.

“Can you believe we are talking about the dreaded “R” word again. Yes The latest buzz on Wall Street is that the economy may fall back into a recession and some of the most respected economists say the risk of recession has gone up compared to just six months ago.”

Many hoped the end of the debt ceiling crisis would give Wall Street some relief, but there are other economic woes plaguing the market-- unemployment, a weakening European economy and a drop in consumer spending.

“New figures from the commerce department show consumer spending fell .2 percent in June. That’s the first drop in nearly 2 years. Incomes also grew by only a tenth of a percent -- the weakest growth since September. Consumer spending is very closely watched of course because it accounts for 70 percent of economic activity.”

The LA Times says there is no quick fix to this problem, but some are looking to the Fed for more stimulus measures.

"’It will be too early for the Fed to conclude they have to do something,’ said David Resler, chief economist at Nomura Securities in New York. Even so, he said, the central bank may have no choice but to indicate ‘a willingness to do something’ if things worsen substantially.”

So what should you do as an investor?Don't panic -- says InvestorPlace.

“...there’s no need to run out and make knee-jerk sells due to the volatility. Long-term investors or income-oriented investors particularly have no reason to run screaming... A more practical approach would be to rethink your broader investment strategy and safeguards to see if they are doing their job now that the pressure is on.”

Fed policy makers will meet next week to discuss their options.

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