Disappointing Retail Sales Data Weighing On Wall Street - U.S. Commentary

(RTTNews) - While stocks moved sharply lower at the start of trading on Wednesday, selling pressure waned not long after the open. The major averages have subsequently climbed off their early lows but remain stuck firmly in negative territory.

In the past few minutes, the major averages have given back some ground, but they remain well off their worst levels. The Dow is down 186.69 points or 1.1 percent at 17,426.99, the Nasdaq is down 25.15 points or 0.5 percent at 4,636.35 and the S&P 500 is down 16.65 points or 0.8 percent at 2,006.38.

The initial weakness on Wall Street was partly due to the release of disappointing U.S. retail sales data for the month of December.

The Commerce Department said retail sales slumped by 0.9 percent in December, while economists had expected sales to edge down by just 0.1 percent.

The bigger than expected drop in sales was due in large part to lower gasoline prices, although the report still raised concerns that the U.S. economy could succumb to the slowdown overseas.

Rob Carnell, chief international economist at ING, said, "With the U.S. about the only beacon of growth globally, if even this engine is spluttering, then a more substantial market correction than we have already seen may well be on the cards."

Concerns about the global economy are contributing to significant weakness among steel stocks, with the NYSE Arca Steel Index tumbling by 3.1 percent. With the loss, the index has fallen to its lowest levels in almost six years.

Financial stocks are also seeing notable weakness due in part to a negative reaction to quarterly results from JP Morgan (JPM).

Reflecting the weakness in the financial sector, the NYSE Arca Broker/Dealer Index and the Dow Jones Banks Index are down by 2.2 percent and 2 percent, respectively.

Shares of JP Morgan are down by 4.2 percent after the financial giant reported weaker than expected fourth quarter results.

Energy, chemical, and computer hardware stocks are also seeing considerable weakness, moving lower along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index tumbled by 1.7 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index has plummeted by 1.9 percent, the French CAC 40 Index and the German DAX Index are down by 0.6 percent and 0.5 percent, respectively.

In the bond market, treasuries are moving notably higher on the heels of the disappointing retail sales data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.5 basis points at 1.825 percent.