Today was supposed to be the day of days for stocks. Oil collapsed by $6 on news that Hurricane Gustav had done relatively little damage to oil facilities. The major indexes opened up nearly 2%. Stocks tied to fuel prices, especially airlines and auto shares, spiked.

A little after midway through the afternoon, it began to dawn on traders that less expensive oil does not solve the problems of falling employment and weak spending by consumers and businesses. Suddenly, the numbers on Wall Street turned red.

Dow: 11,515.46 (-.24%)

NASDAQ: 2,349.39 (-.77%)

S&P 500 1,277.35 (-.43%)

10-Year Note 2.7460 (-.0670)

52-Week Lows

Despite rumors of a large investment from the Korea Development Bank, Lehman (NYSE: LEH) moved from a big gain to trading flat to down at the close. Investors must still think the mortgage and credit crisis has a long way to go. Merrill Lynch (NYSE: MER) dropped 3%. Ambac (NYSE: ABK), which has recovered from its lows of a month ago, also sold down 1%.

Just a few weeks back, tech was the one sector that was going to hold its own. Consumer electronics spending and IT investment by companies were not going to be undercut by slowing GDP. That was true until Dell (NASDAQ: DELL) reported weak numbers last week. It sold off 3% and mega-cap techs Apple (NASDAQ: AAPL), Cisco (NASDAQ: CSCO), and Intel (NASDAQ: INTC) all dropped.

It will be interesting to see what happens on a day when oil goes back up.

Douglas A. McIntyre is an editor at 24/7 Wall St.