US stocks drop at open on disappointing retail sales report

SHARE US stocks drop at open on disappointing retail sales report

AP file poto

NEW YORK — U.S. stocks fell sharply at the opening of trading Wednesday after a government report showed retail sales declined last month despite lower gas prices and a pickup in hiring. All 10 sectors of the Standard and Poor’s 500 index were lower, led by raw materials companies. The yield on the 10-year Treasury note fell to its lowest level since May 2013. Copper prices plunged to a five-year low.

KEEPING SCORE: The Standard & Poor’s 500 index fell 14 points, or 0.7 percent, to 2,009 as of 10:06 a.m. Eastern time. The Dow Jones industrial average dropped 161 points, or 0.9 percent, to 17,453. The Nasdaq composite fell 13 points, or 0.3 percent, to 4,648.

SLUMPING SALES: The Commerce Department reported early Wednesday that retail sales fell 0.9 percent in December, the biggest decline since January last year. The drop shows consumers are reluctant to spend despite lower gas prices and a pickup in hiring.

DISMAL FORECAST: The World Bank downgraded its forecast for global growth this year to 3 percent from 3.4 percent. It blamed sluggish economies in Europe and Japan, and a slowdown in China.

COPPER CAPITULATES: The price of copper, a metal used in many industries, plunged for a second day following the World Bank’s downgrade. It fell 4.5 percent to $2.53 a pound. Mining stocks fell sharply as a result. Freeport-McMoRan plunged $2.10, or 10 percent, to $18.93.

ANALYST’S TAKE: “Copper can be a good leading indicator for the global economy because it is widely used in construction and manufacturing processes,” said Fawad Razaqzada, a technical analyst at

BANK BLUES: JPMorgan Chase fell $2.22, or 3.8 percent, to $56.58 after reporting a 7 percent drop in fourth-quarter earnings. The bank was hit by more legal costs and a decline in trading revenue.

EUROPEAN COURT RULING: The euro dropped to a nine-year low of $1.1725, below its launch rate of $1.1747. It recovered to trade flat on the day at $1.1782. The trigger for the decline was a ruling from an advocate general with the European Court of Justice that the European Central Bank’s offer in 2012 to buy government bonds of troubled countries is legal in principle.

Analysts said that ruling has cleared the way for the ECB to announce a program to buy government bonds at its Jan. 22 policy meeting.

EUROPE FALLS: France’s CAC 40 was down 1.3 percent while Germany’s DAX fell 1.1 percent. Britain’s FTSE 100 dropped 2.4 percent, underperforming its peers because miners make up a big chunk of the index.

ASIA’S DAY: Japan’s Nikkei 225 dropped 1.7 percent and South Korea’s Kospi edged down 0.2 percent. The Hang Seng in Hong Kong slipped 0.4 percent. The Shanghai Composite index surrendered 0.4 percent.

BONDS: The yield on the 10-year Treasury note dropped to 1.82 percent from 1.90 percent late Tuesday, a large move.

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