Stocks Open Lower as Retail Sales Show Steep Drop

NEW YORK - Wall Street pulled back again Wednesday after economic data raised the possibility that the country is either in a recession or moving toward one.

The government's report that retail sales plunged in September by 1.2 percent — almost double the 0.7 percent drop analysts had expected — raised the possibility that consumers may not be as willing to reach for their wallets in the coming months as they worry about a shakey economy.

The Commerce Department report is sobering because consumer spending accounts for more than two-thirds of U.S. economic activity. The reading comes as Wall Street is begining to refocus its attention on the economy following stepped up government efforts to revive the stagnant credit markets.

Investors also digested third-quarter earnings from two banks caught up in the mortgage mess. JPMorgan Chase & Co. reported an 84 percent decline in its third-quarter profit, offering further evidence of how the financial crisis is slamming the economy.

JPMorgan, which bought the assets of failed bank Washington Mutual Inc. late last month as a result of the mortgage bust, said the profit drop reflected losses on bad mortgage investments, leveraged loans and home loans. Still, the results beat expectations.

Also Wednesday, Wells Fargo & Co. reported that its third-quarter profits fell 23 percent after it took hits on investments in troubled finance companies and increased its credit reserves. The gain topped expectations.

In the first half-hour of trading, the Dow Jones industrial average fell 214.89, or 2.31 percent, to 9,096.10.

Broader stock indicators also fell. The Standard & Poor's 500 index fell 30.13, or 3.02 percent, to 967.88, and the Nasdaq composite index rose 39.83, or 2.24 percent, to 1,739.18.