It was a stomach-churning summer that most investors would like to forget.
The United States lost its top-of-the-line credit rating for the first time. The financial system of Europe seemed ready to collapse. Money managers sifted through data for signs that the economy was about to slide into a new recession.
In the financial markets, the result was the most volatile three months since the depths of the credit crisis in 2008 and 2009. Investors had a hair trigger: On four straight days in early August, the Dow Jones industrial average swung more than 400 points.
As much as investors might like to put the summer of swings behind them, analysts say they should brace for more.
Even if the next corporate earnings season, in October, shows that companies are still making money, it may not be enough to calm the markets until the bigger questions about Europe are answered.
Europe's debt problems are "going to continue to overshadow everything else in the market until we have a resolution," said Stephen Auth, chief investment officer at Federated Investors.
The European Union is wrestling with crippling debt in a handful of nations. If those nations can't make payments, banks that hold their national bonds will suffer deep losses, and lending could tighten worldwide around the world _ possibly leading to a widespread recession.
For now, investors can expect ugly quarterly statements. The Standard and Poor's 500 index, the basis for most mutual funds that invest in U.S. stocks, fell 14 percent over the three months that ended in September.
Riskier stocks fared even worse. The Russell 2000 index of smaller companies plunged 22 percent _ enough to meet the technical definition of a bear market for the first time since March 2009.
Investors overlooked fundamentals of individual companies and made bets on the whole market. On more than half the trading days since Aug. 1, more than 400 of the stocks in the S&P 500 rose or fell as a group, according to Bespoke Investment Group.
There have been 42 of these "all or nothing" days this year, a pace that would break the full-year record of 52, set in 2008.
Perhaps the best investment over the quarter was the very thing everyone fretted about _ U.S. government debt.
Treasury prices soared even after the S&P ratings service knocked American debt down one notch from the highest level on Aug. 5. On Sept. 22, the yield on the benchmark 10-year Treasury note hit a record low, 1.71 percent. Bond yields fall when prices rise.
The message: Investors valued safety over profits. With all the uncertainty, the best bet seemed to be that the U.S. government would repay its debts, even if it meant lousy returns for investors.
Fears about the U.S. economy were heightened in September after the Federal Reserve said it believed that the economy has "significant downside risks" that will hamper a quick recovery, including high unemployment, a depressed housing market and slow growth in consumer spending.
The Fed announced Sept. 21 that it would shuffle its holdings of Treasury bonds to help push down interest rates on mortgages and other long-term loans. It is hoping that cheaper money will make consumers and businesses spend more. But its bleak economic outlook sent the Dow down 675 points, or nearly 6 percent, over a two-day span.
Raw materials like oil, copper and corn plunged on fears that demand would dry up. Gold shed nearly 10 percent between Sept. 19 and 23 as investors sold their holdings for cash to cover losses in other financial markets.
Few analysts think the stock market will be any smoother during the last three months of the year. Europe's problems are unsettled, unemployment remains high at 9.1 percent, and there's no sign Washington will agree on fixing the economy.
Typically, September is the worst month of the year for the stock market. Since 1950, the S&P 500 has fallen by an average of 0.6 percent during the month, according to the Stock Trader's Almanac. But September's losses tend to be made up quickly in October, with its average gain of 0.6 percent.
Few think that will happen again this year. Sam Stovall, chief equity strategist at S&P, points to a fact that could encourage bullish investors, however: Since World War II, a sharp decline of 10 percent in more in the S&P 500 over one quarter has been followed by an average gain of 7.2 percent the next, he said.
"Investors are no better than hyperactive first-graders playing musical chairs and trying to out-anticipate the other," he said. "This is no different. They start to think the market is oversold, and they should buy it when it's cheap."
Corporate earnings, typically the main focus of the market, are becoming harder to forecast because of all the clashing signs of the global economy. Analysts are predicting that companies in the S&P 500 make 13 percent more over the three months ending in September than at the same time last year, according to data provider FactSet.
Investors aren't as convinced and are sending stock prices lower. The S&P 500 now trades at 10.7 times what analysts think the companies will make over the next year, which suggests that stocks are cheap. When the economy looked like it was picking up in February, the index traded at a multiple of 13.6 times earnings. Its 10-year average is 15.
Even so, some companies are proving bearish investors wrong. Nike beat Wall Street's expectations when it reported its corporate results Sept. 22 and said that demand for athletic apparel and sneakers grew in nearly every market worldwide. Its stock jumped more than 5 percent.
Some experts say investors should hold their noses and buy stocks anyway. "We remain positive regarding stocks relative to bonds and cash and view the current pullback as an opportunity," Bill Stone, chief investment strategist at PNC, wrote in a note to clients. "Stock valuations are attractive at the moment."
Assuming, he added, that corporate earnings don't collapse _ another sign that uncertainty rules right now on Wall Street.