Stocks slumped Thursday, building on the 2008 selloff on recession worries following comments from Federal Reserve Chairman Ben Bernanke, and the corporate and economic news

Bernanke told Congress that the economic outlook has worsened and that lawmakers should enact a fiscal stimulus plan soon. Also weighing: Merrill Lynch’s big quarterly loss, more problems for the housing sector and a sharp drop in the Philly Fed – a key regional manufacturing reading.

The Dow Jones industrial average lost 306 points to close at 12,159.