Weak Economic Data Slams Wall Street

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Stocks pared significant losses Wednesday, but still closed deep in negative territory, as disappointing economic reports reignited growth worries.

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Today’s Markets

The Dow Jones Industrial Average (INDEXDJX:DJI) shed 173 points, or 1.1%, to 16,141. The S&P 500 (INDEXSP:GSPC) fell 15.2 points, or 0.8%, at 1,862. The Nasdaq (NASDAQ:IXIC) dropped 11.9 points, or 0.3%, to 4,215.

The Dow completed its fifth consecutive day of red ink amid growing concerns over the strength of the U.S. recovery and economic growth overseas. The blue-chip index fell 457 points in midday trading, the largest intraday drop in more than three years when the Dow saw a 527-point plunge in September 2011.

In the wake of the steep selloff, the CBOE’s volatility index reached its highest level since December 2011. Traders piled into the safe-haven of U.S. Treasury bonds, pushing the yield on the 10-year note below 2% for the first time in 16 months.

The Commerce Department said retail sales fell 0.3% in September compared to the prior month, marking the first negative reading since January. Economists were looking for a 0.1% decline.

Meanwhile, the U.S. producer-price index booked a surprise drop of 0.1% last month versus August. It was the first decline in more than a year.

Fears over the spread of the Ebola virus, which has killed over 4,000 people in Africa, are also casting a shadow over the market. The Centers for Disease Control and Prevention said a second nurse who treated the first case of Ebola in the U.S. tested positive and recently traveled on a flight from Cleveland to Dallas.

On the corporate front, Bank of America (NYSE:BAC) shares slipped 4.6% after reporting a much smaller third-quarter profit. The results included legal costs tied to a $16.7 billion settlement with the Department of Justice. The nation’s No. 2 bank also reported lower-than-expected revenue.

Railroad operator CSX (NYSE:CSX) beat expectations for both earnings and revenue, and shares ended the day 1.1% higher. During its earnings call, CSX declined to comment on reports that it rebuffed a merger proposal from Canadian Pacific Railway (NYSE:CP).

Time Warner (NYSE:TWX) was another bright spot Wednesday. The media giant rose 2.2% on word that HBO, Time Warner’s subscriber channel, will launch a standalone online video service next year.

In commodities, West Texas Intermediate crude oil fell six cents to $81.78 a barrel, the lowest since June 2012. Wholesale New York Harbor gasoline was down about three cents at $2.15 a gallon.