* Bleak retail sales data fuels recession fear
* Bernanke says economy faces a significant threat
* Energy, manufacturers, retailers fall
* Dow off 7.9 pct, S&P down 9 pct, Nasdaq off 8.5 pct
(Updates to close)
By Kristina Cooke
NEW YORK, Oct 15 (Reuters) - Wall Street had its worst day
since the 1987 stock market crash on Wednesday, as bleak
economic data fed worries that all the efforts to unlock
credit markets may not stave off a severe recession.
Federal Reserve Chairman Ben Bernanke added to those
concerns when he said the economy faced a "significant threat"
from paralyzed credit markets.
Dismal monthly U.S. retail sales set the tone for the
session, dropping the most in more than three years, while a
measure of New York state manufacturing hit its lowest level
since the index started in 2001.
The Nasdaq has now wiped out all of its gains from
Monday's 11 percent rally, while the benchmark S&P 500 is up
only about 1 percent from Friday's close.
Wednesday's data intensified recession fears, as did the
Federal Reserve's Beige Book report, which showed economic
activity weakened across the United States in September as
businesses revised capital investments and consumers curtailed
spending.
Shares of companies considered economic bellwethers, such
as industrial conglomerate Caterpillar Inc <CAT.N>, fell
sharply. Caterpillar's shares slid over 11 percent.
Fears of recession knocked commodities lower, with Exxon
Mobil <XOM.N> tumbling 14 percent as the price of oil fell.
"Retail sales spooked investors this morning and has
increased the near-term risk of a broad-based recession," said
Tom Sowanick, chief investment officer at
Clearbrook Financial LLC in Princeton, New Jersey.
The Dow and the benchmark S&P 500 suffered their worst
one-day percentage drops since 1987.
The Dow Jones industrial average <> slid 733.08
points, or 7.87 percent, to 8,577.91, while the Standard &
Poor's 500 Index <.SPX> tumbled 90.17 points, or 9.03 percent,
to 907.84.
The Nasdaq Composite Index <> sank 150.68 points, or
8.47 percent, to 1,628.33.
Shares of retailers skidded, with Wal-Mart falling 8.1
percent to $50.05 and Home Depot dropping 5.9 percent to
$19.83. Analysts said the weak retail sales data underscored
the severity of the squeeze on consumers faced with sliding
home values, a tumbling stock market and tight credit.
Caterpillar's shares fell 11.4 percent to $42.06.
Financial shares fell after Meredith Whitney, an
influential bank analyst at Oppenheimer & Co, said
government's plan to stabilize key U.S. banks by injecting
$250 billion is not a "panacea solution". The S&P's financial
sub-index <.GSPF> dropped 9.1 percent.
Shares of State Street Corp <STT.N>, one of the world's
biggest institutional asset managers, plummeted 17.4 percent
to $46.83. The company reported rising unrealized losses in
its commercial paper program and investment portfolio,
sparking concerns among investors.
In the energy sector, Exxon Mobil fell 14 percent to
$62.35, while Chevron <CVX.N> lost 12.5 percent to $59.98.
U.S. crude futures slid to a new 13-month low below $75 a
barrel as fears of demand falling in a recession and slumping
equities further pressured the oil markets.
Strong results from Coca-Cola <KO.N>, the world's largest
soft-drink maker, helped it buck the trend after it posted
quarterly profit that beat Wall Street's expectations. Coke's
stock shot up 1.1 percent to $44.21 -- the only one of the 30
Dow industrials that finished higher.
Trading was low on the New York Stock Exchange, with about
1.68 billion shares changing hands, below last year's
estimated daily average of roughly 1.9 billion, while on
Nasdaq, about 2.54 billion shares traded, above last year's
daily average of 2.17 billion.
Declining stocks outnumbered advancing ones by 9 to 1 on
the NYSE and by 8 to 1 on the Nasdaq.
(Additional reporting by Jennifer Ablan; Editing by Jan
Paschal)
