Stocks continue to fall; Dow is off 200-plus points

The stock market resumed its slide this morning as fresh evidence of a slowing economy caused the Dow Jones industrial average to drop more than 200 points.

Weak retail sales coupled with a large writedown at banking giant Citigroup Inc. intensified worries that slackening consumer spending could drive the economy into a recession – if one hasn’t begun already.

At noon Eastern time, the Dow was off 228.10 points, or 1.8%, to 12550.05. The Standard & Poor’s 500 index slumped 31.34 points, or 2.2%, to 1384.91.

Retail sales fell 0.4% in December, the month that many economists are pointing to as the onset of a recession. Sales rose 4.2% for the entire year – a solid showing – but it was the weakest annual performance since 2002, and investors were preoccupied by the monthly numbers.

Citigroup shares fell 7% to $27.01 after the company reported a nearly $10-billion quarterly loss, announced an $18.1-billion sub-prime-related writeoff, cut its dividend and raised additional capital.

Citigroup results added to other evidence that a drop-off in consumer spending is hitting banks and retailers.

Citigroup reported consumer credit losses of $1.6 billion and added $3.9 billion to its loan-loss reserve. The company blamed increased delinquencies on first and second mortgages, unsecured personal loans, credit cards and auto loans.

walter.hamilton@latimes.com