Markets fall on $120 oil, weak dollar, mixed earnings

The Dow was down as much as 150 points today as oil rose, the dollar fell and corporate earnings were mixed at best. As of 1:15, the Dow is at 12,684, down 140.

Bad news for the equities markets seems to be popping up just about everywhere you look. Not even good earnings from McDonald's (NYSE: MCD) could cut through the gathering economic gloom, and Mickey D's is down on lower same store sales despite the good earnings news.

Oil flirted with a record $120 a barrel, while gold was up $6 to $924. Banks are still looking deeply troubled as the housing market bubble keeps deflating. And the dollar fell through the $160 mark against the euro for the first time ever.

It may be that the reality of a recession is starting to sink in among traders. Of course, there are plenty of bears out there who are saying 'I told you so'. Rising oil prices and the falling dollar are two sides of the same coin: a declining American economy. While traders have not given in completely, they are nervous. "We're in a day-to-day assessment of how good earnings season is, and right now there's more bad news than good news -- the parade has been less positive than we've anticipated." So said Art Hogan, chief market analyst at Jefferies & Co. The implication is that we haven't seen anything yet. A few more weak earnings reports, and there's no telling how far this market could drop.