NEW YORK ( TheStreet) -- The bad economic news finally got to be too much on Wednesday, and stocks suffered a sweeping pullback.

The odds are slightly in favor of more selling on Thursday, given the depth of the weakness. Data from Biryani Associates finds there's a 55% probability of a down day for the S&P 500 after a decline of more than 2% in the previous session with the average loss running at about 20 basis points.

The big question for the rest of the week now is: Was the selling deep enough to price in what now seems likely to be a truly ugly nonfarm payrolls report on Friday, insulating traders somewhat through the end of this holiday-shortened week.

The expectations for Friday's report starting to coming down almost immediately. Examples include Standard & Poor's economists bringing their estimate down to a rise in nonfarm payrolls of 125,000 (vs. the pre-ADP consensus of 170,000), and High Frequency Economics putting the number at 75,000. Ouch.

Thursday's economic data will provide more clues about the state of the flagging recovery. At 8:30 a.m. ET, Wall Street gets to parse initial claims for week ended May 28 (consensus 413,000, according to Briefing.com), as well as continuing claims for week ended May 21.

Also providing more fodder for the debate about whether this patch of bad data is a blip related to the Japan earthquake in March or signs of a real slowdown will be factory orders for April. The consensus is expecting decline of 1%, but Briefing.com sees a drop of 2% when the number is released at 10:00 a.m. ET. High Frequency Economics Chief U.S. Economist Ian Shepherdson sides with Briefing.com, saying the steep drop in durable goods orders telegraphed the 2% tumble.

Other data includes the revision of nonfarm productivity and labor costs for the first quarter at 8:30 a.m. ET, which isn't likely to move the needle much, and crude inventories for the week ended May 28 at 11:00 a.m. ET, where weak demand from the U.S. has already been anticipated.

The 'QE3' talk is likely to continue on Thursday as well, but RDQ Economics was having none of it on Wednesday, going so far as to say 'QE2' wasn't such a good move after all.

"We think QE3 would be a terrible idea since we believe consumers and businesses have been hurt by sharply rising commodity-based inflation, which we think has been a result of Fed policy," the firm said. "From the Fed's perspective, core inflation is now rising rather than falling (as it was when the Fed launched QE2). In addition, we think the Fed would be concerned about the political fallout that could result from further Treasury purchases."

RDQ said it's sticking with "a defensive strategy on equities" for the time being, the same as it suggested on April 1.

While all 30 Dow components fell on Wednesday, Bank of America ( BAC) was neck-and-neck with Alcoa ( AA) for the worst performing blue chip with a decline of 4.3% on volume of 172 million, second on the Big Board to only Nokia ( NOK), which saw a boost in trading interest from the rumor mill.

Underlining just how bad things have gotten in the financial sector, Bank of America CEO Bryan Moynihan moved to assure investors on Wednesday that the nation's largest bank by assets doesn't need raise more capital, but with the stock now having convincingly broken below both its 50-day and 200-day moving averages of $12.17 and $13.17 respectively, it could test November's 52-week low of $10.91 before long. The banks have been called upon to provide some leadership for the broad market for awhile now but shareholders were no doubt hoping it would be in the other direction.

The corporate news calendar is again sparse. Movado Group ( MOV) is one of the few companies reporting quarterly results. The average estimate of three analysts polled by Thomson Reuters is calling for a loss of 3 cents from the Paramus, N.J.-based watch maker on revenue of $79 million. The stock closed Wednesday at $16.10, up 2.7% in 2011.

And finally, a big mover in after-hours action was Orbitz Worldwide ( OWW), which jumped more than 40% after scoring a small victory in its ongoing legal dispute with American Airlines.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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