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US: Wall St drops on global economic worries

[NEW YORK] US stocks slumped shortly after the opening bell on Wednesday to extend recent declines, as worries over weak economies globally continued to pressure commodities and as US retail sales for December fell short of expectations.

Copper touched its lowest since July 2009 and were last down 5 per cent at US$5,571.50 a tonne after the World Bank cut its global forecast for economic growth in 2015 and next year. Shares of Freeport McMoRan Inc lost 9.6 per cent to US$19.01 as the worst performer on the S&P 500.

Oil prices remained volatile, struggling to find a floor. Brent crude fell to a low of US$45.59 before rebounding to trade up one per cent to US$47.06, while US crude was up 1.3 per cent at US$46.50 after falling as low as US$45.01. The Energy Information Administration's oil inventory report is due at 10:30 a.m. EST (1530 GMT).

Consumer spending in December disappointed, as core retail sales fell 0.4 per cent, short of expectations calling for a 0.4 per cent increase and the 0.6 per cent rise in the prior month. The S&P retail index lost 0.7 per cent.

"The futures weren't looking too good and that retail report didn't do it any good, it took a big nosedive after that," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas. "It doesn't look like it's going to be a pretty day at this point."

The Dow Jones industrial average fell 228.76 points, or 1.3 per cent, to 17,384.92, the S&P 500 lost 20.41 points, or 1.01 per cent, to 2,002.62 and the Nasdaq Composite dropped 32.98 points, or 0.71 per cent, to 4,628.52.

Adding to the pressure, JPMorgan Chase & Co fell 4.1 per cent to US$56.46 after the biggest US bank by assets reported a 6.6 per cent drop in quarterly profit. Wells Fargo & Co shed 0.8 per cent to US$51.46 after posting quarterly results.

Each of the 10 major S&P sectors were in negative territory, with materials down 2 per cent, and financials off 1.6 per cent, leading the decline.

Companies were expected to show fourth-quarter earnings growth of 3.7 per cent from a year earlier, according to Thomson Reuters data, down from 11.2 per cent growth forecast on Oct. 1.

The benchmark S&P index has fallen for three straight sessions and has declined in eight of the past in 10 days. The index is down more than 4 per cent from its last record high on Dec. 29.

Other data showed US import prices recorded their biggest drop in six years in December as the cost of petroleum plunged.

A report on business inventories was scheduled for 10 am (1500 GMT).

Declining issues outnumbered advancing ones on the NYSE by 2,270 to 513, for a 4.42-to-1 ratio on the downside; on the Nasdaq, 1,722 issues fell and 602 advanced for a 2.86-to-1 ratio favoring decliners.

The benchmark S&P 500 index was posting 4 new 52-week highs and 21 new lows; the Nasdaq Composite was recording 6 new highs and 65 new lows.