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STEVE INSKEEP, host:

Well, if you got all your money in the stock market, it may be worth on average about 2.5 percent less this morning. That's the amount by which the Dow Jones Industrial fell 360 points, a little bit more than that, in fact, yesterday.

Now investors are hoping that the monthly jobs report, which comes out later today, will be a sign that the economy is still holding up.

NPR's Jim Zarroli is covering this story. He joins us now.

Jim, Good morning.

JIM ZARROLI: Good morning.

INSKEEP: I have to mention that apparently the market started falling yesterday after some very bad news from Citigroup, which raises questions about whether financial institutions still have more bad news for us.

ZARROLI: Yeah, the big banks have just been getting pummeled lately. The financial services industry in general witnessed what happened to Stan O'Neal at Merrill Lynch this week. Yeah, it's because of the subprime crisis where we've had lots of layoffs, lots of falling profits.

The analyst that you referred to is Meredith Whitney at CIBC World Markets. She basically came out and said that Citigroup's profits are going to fall next year. They're going to have to sell some assets down, cut their dividend. Then she also downgraded Bank of America. Well, these are the two biggest banks. So people got really nervous and all of the banking sector went down.

By the way, Citigroup is kind of a bellwether stock. And this is really increasing the pressure on the CEO, Charles Prince, to step down. A lot of people have been very unhappy with the way he's running the company. He wasn't popular with shareholders. Now he's even less popular.

INSKEEP: So just like summer, you've got bad news about the mortgage industry, which is causing trouble for financial institutions, and you've got a wildly fluctuating stock market. Are things any better than they were?

ZARROLI: Well, I think it says that people are still worried that they're no better than they were. They're still worried about subprime and everything that that entails. You know, there's just this continuing grinding fear out there about the economy slowing down.

Yesterday you had a very disappointing report about consumer spending. There was another disappointing report about manufacturing activity. Retailers are very worried about the holiday season coming up. Then you have oil prices that keep going up, getting closer and closer to a $100 a barrel. So if you're looking for bad news, there's a lot to choose from.

INSKEEP: Why weren't investors reassured this week when the Federal Reserve cut interest rates?

ZARROLI: Well, they did seem to be reassured for a little while. You saw the stock market go up Wednesday after the Fed cut rates, but it was almost like people went home and sort of slept on it and decided, well, maybe things aren't so good after all.

Part of the problem is that the Fed issued the statement that seems to say it was done cutting rates for a while. They didn't say that exactly, but once people had the chance to think about it, that was the inference that they made.

So you know, if you're worried about banks, you're worried about housing, you're worried about retail sales, the Fed coming out and saying, you know, it probably won't cut rates again isn't want you to hear. So people started selling off stocks. That's what you saw yesterday.

INSKEEP: Okay. So before the markets open today formally we'll get a little bit more news, this employment numbers measurement. Last month's jobs report was pretty strong. What about this time?

ZARROLI: Well, I think the prediction of economists is that we're going to have about 85,000 new jobs in October. We had about 110,000 in September.

You know, for all the problems that people are worried about in the economy, that hasn't so far been really reflected in the labor market, and that's one of the things people are worried - looking for now. They're looking to see, you know, is there going to be a sign that that's going to change.

INSKEEP: Jim, thanks very much.

ZARROLI: You're welcome.

INSKEEP: NPR's Jim Zarroli is in New York, and he's covering the fluctuations of the stock market.

The Dow Jones Industrials fell more than 360 points yesterday, and we're waiting to see what happens today after we get news of the employment reports.

You're listening to MORNING EDITION from NPR News.

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