Wall Street Sinks as Retail Data Disappoint

Stocks in New York are trading with losses out of the gate as another batch of daunting economic data, and dismal December retail sales, weigh on sentiment.
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Stocks in New York opened with losses Wednesday as another batch of daunting economic data -- including even-worse-than-predicted December retail sales -- and expectations for sour earnings settled in.

The

Dow Jones Industrial Average

was sinking 124 points at 8324, and the

S&P 500

was losing 17 points at 854. The

Nasdaq

was down 23 points at 1522.

As expected,

Citigroup

(C) - Get Report

and

Morgan Stanley

(MS) - Get Report

announced late Tuesday that Morgan Stanley would pay $2.7 billion for a 51% stake in a combined

brokerage operation

, the largest in the world.

Citigroup is expected to post its fifth straight quarterly loss, but first

JPMorgan Chase

(JPM) - Get Report

will release its results on Thursday, a week ahead of schedule.

Companies -- plagued by the economic downturn -- continue scale back operations in reaction.

Software company

Oracle

(ORCL) - Get Report

has cut "several hundred" of its more than 86,000-employee workforce, according to two sources close to the situation,

Reuters

reported.

Also

Nortel Networks

(NT)

is expected to file for

bankruptcy protection

as early as Wednesday, according to a report in Toronto's

Globe and Mail

.

A storm of economic data was slated for Wednesday.

The Census Bureau said Wednesday that

retail sales

for December declined 2.7%, vs. an expected decline of 1.2%. Factoring out autos, retail sales declined 3.1%, vs. a 2.5% decline in the prior month and the expectation for a 1.4% decline.

The Mortgage Bankers Association said early Wednesday that the market composite index, a measure of mortgage loan application volume increased 15.8% on a seasonally adjusted basis to 1324.8 for the week ended Jan. 9. On an unadjusted basis, the index increased 95.7% compared with the previous week and 52.4% from a month prior.

The Refinance Index increased 25.6% to 7414.1, its highest level since the week ending June 27, 2003. The seasonally adjusted Purchase Index, meanwhile, fell 14.1% to 295.8.

The MBA said the average contract interest rate decreased to 4.89% percent from 5.07% for 30-year fixed-rate mortgages, and decreased to 4.63 percent from 4.67 percent for 15-year fixed-rate mortgages.

Meanwhile, the Labor Department reported that the import price index declined by 4.2%, vs. a 7% decline a month prior, led by decreases in both petroleum and non-petroleum prices. The import and export prices can be used to indicate inflation pressures created by changes in foreign exchange rates.

Overall, import prices fell 9.3% in 2008, the first year the index declined since a 9.1% drop in 2001 and the largest calendar year decline since the index was first published in 1982.

The export price index fell 2.3%, less steep than the 3.4% decline a month earlier. Export prices declined 3.2% in 2008, the first calendar year drop since 2001 and the largest since 1998.

The

Federal Reserve's

beige book, which provides details about the strengths and weaknesses of the nation by region, will be released later Wednesday.

In commodities, oil was rising 56 cents at $37.22 a barrel, while gold was down $2.80 to $817.90 an ounce.

Longer-dated Treasuries were mildly lower; the 10-year note was retreating 25 0.5/32 to yield 2.2%, and the 30-year was down 1 17/32, yielding 2.9%. The dollar was stronger against the euro and weaker against the pound and yen.

Overseas, the FTSE in London and the DAX in Frankfurt were both edging lower Wednesday, but Japan's Nikkei Hong Kong's Hang Seng ended in positive territory.

Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. AP contributed to this report.