If you were to liken the stock market to a person, you might say it suffers from bipolar disorder, with the recent move indicative of its depressive side taking over.
The only significant developments of the past two weeks have been the debt ceiling having been increased and a relatively benign unemployment number this past Friday. And even if the debt "resolution" made no one happy, at least we avoided all of those catastrophic "default" scenarios which were being bandied about.
The reasons being given for the current malaise are the overwhelming debt of various European countries, and the possibility that various European banks may be in trouble. But these aren't anything new. We've been hearing about Portugal, Ireland, Greece, and Spain since last year. They're just an excuse for the market to go down. This of course begs the question of whether the market should ever have gone up as far as it has since early '09, but really, why down so much all of a sudden these past two weeks?
The riots in England are an unpleasant reminder that the low IQ-ed and irresponsible are still with us; but that, too, is nothing new, and shouldn't directly impact the stock markets.
If the stock market is a person, she (he?) thankfully seems to be in a better mood today. But manic depressives are not known for their predictability, so be on your guard.