US open: Stocks fall amid lower than expected retail sales in December

Markets were falling on Wednesday after the US retail sales advance came in lower than expected month-on-month for December.

Early in the day the Dow Jones Industrial Average dropped 1.27% to 17,390.90, the S&P 500 decreased 0.95% to 2,003.79 and Nasdaq declined 0.67% to 4,630.24.

US retail sales fell 0.9% month-on-month in December, posting a sharper decline than consensus expectations of -0.1%.

Barclays Research said: “After incorporating the weaker-than-expected core retail sales data, our tracking estimate of fourth quarter (Q4) real consumer spending fell to 4.1% (previous: 4.4%) and our Q4 real gross domestic product tracking estimate fell two-tenths to 3.4%.”

Oil prices were under continued pressure with WTI down 0.1% at $45.84 a barrel and Brent falling 0.2% to $46.51 a barrel.

Jasper Lawler from CMC Markets said: “Declining oil and copper prices reflect in part oversupply but also slower demand particularly from the likes of China, the world’s biggest buyer of commodities.

“Oil and copper not only have their own particular supply/demand issues but are being pressured by a rallying US dollar in which they are denominated.”

IG analyst Alastair McCaig added: “Copper has managed the impossible by shifting oil off the top of the commodities watch list. This sudden collapse in the metal by more than 5% has been triggered by the World Bank’s downgrade of global growth for 2015.”

Over on COMEX, gold futures were advancing 0.45% to $1,239.90 while the dollar was sliding against the pound, the yen and the euro.

The yield on a benchmark US 10-year Treasury fell eight basis points to 1.82%.

In the corporate world ZIOPHARM Oncology was soaring 57.49% amid news the firm has signed an exclusive licensing agreement with MD Anderson. Meanwhile, Tesla Motors was falling 7.88% following a speech in Detroit on Tuesday where Elon Musk said fourth quarter sales for the company were weak in China.