General Electric Co., Macy’s Inc. and American Express Co. tumbled at least 5.5 percent after the Commerce Department said purchases fell 2.7 percent in December as job losses and dwindling access to credit forced consumers to cut spending. Citigroup tumbled 23 percent, leading the KBW Bank Index to a 13-year low, as Chief Executive Officer Vikram Pandit works to unravel the financial-services empire following four straight quarters of losses.
The Standard & Poor’s 500 Index lost 3.4 percent to 842.62, its steepest decline since Dec. 1. The Dow Jones Industrial Average sank 248.42 points, or 2.9 percent, to 8,200.14. The Russell 2000 Index fell 4.4 percent. The MSCI World Index slid 3.1 percent, its sixth straight decline.
All 24 industry groups and 480 of the companies in the S&P 500 fell following the sixth consecutive monthly decrease in retail sales, the longest stretch of declines in records going back to 1992. The VIX, which gauges the cost of using options as insurance against losses in the S&P 500, jumped 14 percent to 49.14 for its biggest gain since Dec. 1.
The loss of 2.6 million jobs and declining home and stock values are squeezing all American households, hurting retailers from Wal-Mart Stores Inc. to Saks Inc. Today’s retail-sales figures may serve as a reminder to lawmakers of the urgency to enact President-elect Barack Obama’s stimulus proposals to combat the recession.