US stocks plunge by 3 pc

A darkening outlook for companies from banks to retailers to energy producers pummeled Wall Street, sending the Dow Jones industrials down nearly 250 points, or 2.94 per cent, and giving the other major indexes a loss of 3 per cent.

The plunge leaves the Dow and the broader Standard & Poor's 500 index down more than 9 per cent in six sessions. The S&P 500, the gauge tracked by professional investors, has now given up half its gains since it closed at an 11-year low on Nov 20.

The Dow fell 248.42, or 2.94 per cent, to 8,200.14 yesterday. The S&P 500 fell 29.17, or 3.35 per cent, to 842.62 and the Nasdaq composite index fell 56.82, or 3.67 per cent, to 1,489.64. Both the Dow and S&P 500 hit intraday lows not seen since early last month.

The Russell 2000 index of smaller companies fell 20.62, or 4.35 percent, to 453.17. Only 314 stocks rose on the New York Stock Exchange, while 2,796 fell.

Volume came to a light 1.42 billion shares. One of the catalysts behind the market's latest bout of turbulence yesterday was the Commerce Department's December retail sales report.

Wall Street knew retailers' cash registers weren't as busy this holiday season but the report was much worse than anticipated.

The department said retail sales dropped 2.7 per cent last month, more than double the 1.2 per cent decline analysts forecast.