RTTNews - Stocks continue move lower in mid-afternoon trading on Wednesday, as traders react to earlier economic data that came in far below expectations. The major averages are posting substantial losses on the day after ending the previous session mixed.

The day's pullback comes after a report showing an unexpected decrease in retail sales dampened the recent pick up in economic prospects that followed an influx of largely positive economic reports in recent weeks.

Noting that the increases in retail sales seen earlier this year were the most significant green shoots in the economic landscape, Chris Low, chief economist at FTN Financial said the back-to-back declines in sales in March and April throw the economic recovery into doubt.

The report from the Commerce Department showed that retail sales slipped 0.4 percent in April following a revised 1.3 percent decrease in March. Economists had expected sales remain unchanged compared to the 1.2 percent decrease originally reported for the previous month.

The contraction in retail sales was prompted in part by consumer saving levels remaining high amid the contraction in the U.S. economy. With firms cutting costs, 401k matching has been limited, providing further incentive for frugal spending among consumers.

Early this morning, the last leg of earnings season was started by a report from retail giant Macy's (M), which reported an adjusted loss that was narrower than expected. Nonetheless, shares of Macy's are down 6.4 percent as retail stocks have come under pressure following the disappointing retail sales data.

Other retailers scheduled to announce results include Wal-Mart (WMT), J.C. Penney (JCP) and Abercrombie & Fitch (ANF), which are set to report earnings in the next two days.

Meanwhile, Intel (INTC), the world's largest semiconductor company, was fined a record $1.45 billion for its sales tactics in the European Union. The fine was the largest anti-trust action levied against a firm in EU history. Shortly afterward, Intel CEO Paul Otellini announced the company would appeal the verdict.

The major averages have been more or less rangebound in recent trading, lingering near their worst levels of the day. The Dow is currently down 183.27 at 8,285.84, the Nasdaq is down 47.83 at 1,668.09 and the S&P 500 is down 22.91 at 885.44.

Dow Components

Most Dow components are firmly in negative territory, contributing to the triple digit loss being shown by the blue chip index in mid-afternoon dealing.

Bank of America (BAC) is turning in one of the Dow's worst performances, with shares of the banking giant falling by 8.4 percent. With the decline, the stock has pulled back further off of a 4-month high set late last week.

Alcoa (AA), General Electric (GE) and Caterpillar (CAT) are also sliding amid the dampened economic outlook. Notable weakness has also emerged in shares of 3M (MMM), with the diversified manufacturer falling by 4.7 percent.

Despite the broad based losses, shares of General Motors (GM) have led the upside in the Dow, climbing by 5.2 percent on the day. The gain by GM comes after it ended the previous session at its worst closing level since the depression.

Additionally, shares of drug makers Merck (MRK) and Pfizer (PFE) are also helping to limit the downside for the Dow, rising by 3.1 and 2.8, respectively.

Sector News

Significant remains visible in most of the major sectors, as the weak retail sales data has generated broad based selling pressure. Real estate stocks are posting steep losses, dragging the Morgan Stanley REIT Index down 6.9 percent, further off Friday's three-month closing high.

With traders worried about the outlook for the economy, steel, housing, airline, and healthcare provider stocks are also posting standout losses. Within the healthcare sector, Sunrise Senior Living (SRZ) is leading the way lower, falling 20.5 percent.

On the other hand, some drug stocks are bucking the downtrend by the broader markets, although the Amex Pharmaceutical Index has pulled back off its best level of the day. The index is currently holding onto a modest gain, up 0.7 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Wednesday. While Japan's benchmark Nikkei 225 Index closed up 0.4 percent, Hong Kong's Hang Seng Index slipped 0.5 percent.

Meanwhile, the major European markets all closed lower, pulling back further off their recent highs. The U.K.'s FTSE 100 Index closed down 2.1 percent, while the French CAC 40 Index and the German DAX Index also finished lower by 2.4 percent and 2.6 percent, respectively.

In the bond market, treasuries are seeing continued strength, benefiting from the substantial weakness among stocks. Subsequently, the yield on the benchmark ten-year note is currently down 7.7 basis points at 3.098 percent.

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