Dow finishes down 389

It's a 3.2 percent drop on the day, with Italy being the dominant story. But before you take out the razor blades, consider this passage in the NYT:

Italy may not be at the precipice yet, analysts say. Even though its nearly 2 trillion euros, or $2.7 trillion, in debt is worth 120 percent of its gross domestic product, it is a far stronger and wealthier economy than Greece or the other smaller nations. Italy's relatively small budget deficit compares well to some other larger nations elsewhere in Europe, like Britain. Italy could withstand interest rates at this level longer than weaker countries like Greece, analysts say, and there are a number of things that may yet happen to ease the crisis -- for example, if Italy elected a new government credibly committed to fixing its debt woes and restarting growth. Also, European leaders could more clearly formulate the terms of a proposed, much-vaunted bailout fund and put it to work, or the E.C.B. could step in more vigorously to buy Italian debt. "Italy is not nearly in as bad of a situation as some observers may suspect," said Marc Chandler, an economist at Brown Brothers Harriman.

Confused? Join the party.