economic downturn

Dozens of U.S. banks will fail in the next two years as losses from soured loans mount and regulators crack down on lenders that take too much risk, especially in real estate and construction, an analyst said.

Stocks plunged further Thursday, sending the S&P 500 down almost 3% and driving the Dow industrial average down more than 1,000 points since the start of 2008, as investors worried about the outlook for the U.S. economy. Federal Reserve Chairman Ben Bernanke said the risks of an economic downturn are more pronounced, and a Philadelphia Federal Reserve survey showed regional manufacturing activity weakened in January. He said the housing sector will be a drag on the economy for much of this year.