I don’t think it takes a whole lot to figure out why the markets are spooked:

Report: announced job cuts spike 60%
economy.ocregister.com

JPMorgan Cuts Third-Quarter US Growth Forecast
cnbc.com

U.S. eats up most of debt limit in one day
$239 billion spike uses up 60% of funding OK’d on Tuesday
washingtontimes.com

Toss in Lawhawks points about both europe and the housing market both sucking and it seems fairly obvious to me why there is a sell-off.