From CNNMoney: NEW YORK (CNNMoney.com) — Recession talk scared Wall Street Wednesday, sending the Dow Jones industrial average to its second biggest one-day point loss ever.

A weak retail sales report and dour forecasts from the Federal Reserve, coupled with sober comments from Fed Chairman Ben Bernanke, sent stocks tumbling.

The Dow Jones industrial average (INDU) fell 733 points, its second biggest one-day point loss ever, second only to Sept. 29 of this year, when the House of Representatives initially rejected the government’s $700 billion bank bailout plan.

Wednesday’s decline was equal to around 7.9%, the Dow’s biggest one-day percentage loss since Oct. 26, 1987.

The Standard & Poor’s 500 (SPX) index lost 90 points, its second-worst one-day point loss ever, also second only to Sept. 29. The loss was equal to 9%, its second biggest slide on a percentage basis since Oct. 19, 1987, a.k.a. Black Monday.

The Nasdaq composite (COMP) lost 8.5% and closed at a new low for 2008, its worst level since June 30, 2003. The decline of 8.5% was its biggest one-day percentage loss since Aug. 31, 1998. On a point basis, it didn’t rate among the 20 worst days.

The decline Wednesday equaled a loss of $1.1 trillion in market value, as measured by the Dow Jones Wilshire 5000, the broadest measure of the stock market. It was the second-biggest one-day loss ever, following Sept. 29.

“It’s stunning,” said Donald Selkin, chief market strategist at National Securities. He said Wednesday’s selloff was an accumulation of all the negatives that are overlapping.

“The poor economic reality is being reflected in the market,” he said.

The day’s news included retail sales at a 3-year low, a reading on manufacturing in the New York area at an all-time low, the Fed’s weak forecast and comments from Bernanke.

“The economy is the issue right now,” said Timothy Ghriskey, chief investment officer at Solaris Asset Management. “It was clear in Bernanke’s speech today, in the retail sales report and in the stock market reaction.”

Ghriskey said the risk level is high now “because we don’t know the duration or the depth of an economic downturn.”

Additionally, Wall Street is impatiently waiting for the many initiatives that have been announced to start loosening up the still-sluggish credit market, a process that won’t happen overnight.

“The Fed and Treasury have thrown the entire arsenal at the problem and those things will work, but the market wants to see it work right away,” said Jim Dunigan, chief investment officer at PNC Wealth Management.

The credit market showed some signs of easing, as a key overnight bank lending rate fell. But the improvement was slowgoing and failed to reassure investors. Global markets were mostly lower.

Investors are also now dealing with the “around-the-clock-effect,” Selkin said. He said that barring some big news in the next few hours, Wall Street’s slide will send Asian markets lower, which will drag on European markets, and in turn hitting Wall Street again Thursday.

Treasury prices gained Wednesday, lowering the corresponding yields. The dollar gained versus the yen and fell against the euro. Oil and gas prices slipped, while gold prices rose.

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