ROBERT SIEGEL, HOST:
I'm Robert Siegel. Even by recent standards, it was a nerve-wracking day on Wall Street. Stocks were down sharply throughout the day. By the time trading ended, they did recover a lot of that lost ground, though. That wasn't the case for oil prices. They fell to their lowest levels since 2003. NPR's Jim Zarroli spent his day watching the market's fluctuation. Hi, Jim.
JIM ZARROLI, BYLINE: Hi.
SIEGEL: Take us through what happened today.
ZARROLI: You know, it was a day like we've seen a lot this month - everybody kind of running for the exits. It's sort of like dominoes falling. You know, we had a big selloff in Asia, then in Europe, then in the United States. At one point in the day, a little bit after noon, maybe, the Dow was down 566 points, which - that's, you know, 3-and-a-half percent - had a lot of energy stocks in particular just getting clobbered. That has everything to do with the way oil price have been coming down. And yeah, as the afternoon wore on, you saw a recovery in stocks, but the Dow still finished down 200 - almost 250 points.
SIEGEL: And is there any particular reason that people think stocks went down so much today?
ZARROLI: Not really. I mean, there were individual stocks like IBM that were down because of earnings. But by and large, you know, people are just looking at what's happening around the world and feeling scared about the economy. I spoke to Mark Zandi, who's the chief economist at Moody's Analytics. He believes this is just based on emotion.
MARK ZANDI: I think it's cathartic. I think investors have seen the declines and have gotten to the point where they're just nervous, maybe a bit panicked, and you get this broad-based selling.
ZARROLI: Zandi says, you know, there are times when euphoria sweeps the markets and everybody buys. And you know, there are times like right now - periods of pessimism, and people sell.
SIEGEL: Jim, is there any evidence one way or another what impact the drop in oil prices is having on the economy?
ZARROLI: Well, you know, a drop in oil prices is a big problem. Of course, if you're an oil producer - very hard to make a profit when prices are down around $27 a barrel. And of course, the longer this goes on, the more trouble it will be for companies. You know, but energy is not as important to the U.S. economy as it is to other places like, you know, Canada or Nigeria or Russia. We do a lot of oil production, but when you look at, you know, the sheer size of the U.S. economy, oil just isn't the kind of factor that it is in other places. Now, Americans do consume a lot of oil, of course, and this drop in prices means people save a lot of money.
SIEGEL: All right. Yeah, people are saving money on gasoline, on home heating oil in the Northeast, also on jet fuel. That sounds like it should be a plus for the economy.
ZARROLI: Yeah, it is. It - of course, it puts a lot of money in people's pockets. That's money they can consume on a - you know, spend on other things. And you know, consumer spending in general in the United States is holding up pretty well right now, which is one of the reasons why people are sort of surprised by what's happening in the stock market.
You know, for all the problems that the U.S. economy has had, it has some real strengths right now. Now, what the market is responding to is what's happening overseas. I mean, we're seeing this slowing growth in China. That's having an impact on, you know, lots of commodity producing countries like Russia, like Brazil, even like, you know, Australian and Canada. Eventually, you know, that's going to have some kind of impact on the United States if things get bad enough. It's just, you know - it's not clear what kind of impact. It's not clear when it will happen, and you know, that's one of the reasons why the stock market is acting so volatile right now.
SIEGEL: That's NPR's Jim Zarroli in New York. Thanks, Jim.
ZARROLI: You're welcome.