Wall Street Extends Its 2009 Retreat
By SARA LEPRO and TIM PARADIS
Updated 1:34 PM PST, Wed, Jan 14, 2009
Volatility is clearly reasserting itself in the stock market.
A darkening outlook for companies from banks to retailers to energy producers pummeled Wall Street Wednesday, sending the Dow Jones industrials down nearly 250 points, or 2.94 percent, and giving the other major indexes a loss of 3 percent.
The plunge leaves the Dow and the broader Standard & Poor's 500 index down more than 9 percent in six sessions. The S&P 500, the gauge tracked by professional investors, has now given up half its gains since it closed at an 11-year low on Nov. 20.
One of the catalysts behind the market's latest bout of turbulence Wednesday was the Commerce Department's December retail sales report. Wall Street knew retailers' cash registers weren't as busy this holiday season but the report was much worse than anticipated. The department said retail sales dropped 2.7 percent last month, more than double the 1.2 percent decline analysts forecast.
The record sixth straight month of declines is only the latest symptom of the economy's ills. Consumers hit by steep drops in home prices, rising unemployment and difficulty accessing credit have no choice but to pull back. That's troubling for Wall Street because consumer spending makes up more than two-thirds of U.S. economic activity. Many analysts predict the year-old recession, already the longest in a quarter-century, will persist at least until late this year.
"No doubt the retail sales numbers that came in just reminded us how bad the fourth quarter is going to look," said Jim Dunigan, managing executive of investments at PNC Wealth Management.
According to preliminary calculations, the Dow fell 248.42, or 2.94 percent, to 8,200.14. All 30 stocks that make up the Dow fell.
The S&P 500 fell 29.17, or 3.35 percent, to 842.62 and the Nasdaq composite index fell 56.82, or 3.67 percent, to 1,489.64. Both the Dow and S&P 500 hit intraday lows not seen since early last month.
The Russell 2000 index of smaller companies fell 20.62, or 4.35 percent, to 453.17.
Copyright Associated Press
First Published: Jan 14, 2009 6:57 AM PST
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