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Ben Bernanke
Federal Reserve Board Chairman Ben Bernanke speaks during a hearing before the House Budget Committee January 17, 2008 on Capitol Hill in Washington, DC. Bernanke was on the Hill to give his views on the outlook of U.S. economy and he said the economy has been growing slow.
Alex Wong/Getty Images

Stocks fell sharply amid concern about the direction of the economy. The more than 300 point drop for the Dow came on the same day that both the White House and Federal Reserve Chairman Ben Bernanke expressed support for an economic stimulus.

Troubling signs were seen on a number of fronts, whether it was the largest-ever quarterly loss posted by Merrill Lynch or the larger than expected decline reported in December housing starts.

Also today, a regional Federal Reserve report showed a sharp decline in manufacturing activity.

The Dow fell nearly 307 points to 12,159. The S&P 500 lost about 40 points to 1,333 while the Nasdaq composite shed 47 points to 2,346.

Declining issues outnumbered advancing issues by a 6 to 1 margin.

NYSE volume topped 5.3 billion shares. Nasdaq volume came to 2.7 billion shares.