Stocks Remain Under Pressure Amid Concerns About Economy - U.S. Commentary

(RTTNews) - Stocks are seeing considerable weakness in mid-day trading on Wednesday, adding to the losses posted in the three previous sessions. Concerns about the economic outlook are weighing on the markets following the release of disappointing U.S. retail sales data.

Currently, the major averages remain firmly negative, with the Dow and the S&P 500 near their worst levels. The Dow is down 250.94 points or 1.4 percent at 17,362.74, the Nasdaq is down 36.70 points or 0.8 percent at 4,624.79 and the S&P 500 is down 22.55 points or 1.1 percent at 2,000.48.

The weakness on Wall Street comes following the release of a report from the Commerce Department showing a much steeper than expected drop in retail sales in 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."

The release of the disappointing retail sales data came on the heels of news that the World Bank cut its forecast for global GDP growth in 2015.

In a biannual report, the World Bank said now expects the global economy to grow by 3 percent this year compared to the 3.4 percent increase estimated in June.

The reduced growth forecast was based on weakness in Europe and Japan even as the bank expects strong growth for the U.S. and some developing countries.

Selling pressure has also been generated in reaction to disappointing quarterly results from JP Morgan (JPM), with shares of the financial giant falling by 4.5 percent.

Before the start of trading, JP Morgan reported fourth quarter earnings that came in below analyst estimates due in part to higher than expected legal expenses.

Sector News

Reflecting concerns about the outlook for global demand, steel stocks continue to see substantial weakness in mid-day trading. The NYSE Arca Steel Index is down by 3.3 percent after hitting its lowest levels in nearly six years.

Allegheny Technologies (ATI), U.S. Steel (X) and Universal Stainless (USAP) are turning in some of the steel sector's worst performances.

Financial stocks also remain under pressure following the disappointing results from JP Morgan. Subsequently, the Dow Jones Banks Index and the NYSE Arca Broker/Dealer Index are falling by 2.7 percent and 2.6 percent, respectively.

Significant weakness also remains visible among energy stocks, which are moving lower despite a modest rebound by the price of crude oil.

Gold, computer hardware, trucking, and retail stocks are also seeing notable weakness, moving lower along with most of the other major sectors.

Other Markets

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 also saw significant weakness on the day. While the U.K.'s FTSE 100 Index plummeted by 2.4 percent, the French CAC 40 Index and the German DAX Index slumped by 1.6 percent and 1.3 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 7.4 basis points at 1.816 percent.