By Kate Gibson

Energy and financial shares paced Wednesday's broad market slide after downbeat December retail sales offered the latest confirmation of a deepening recession.

"Energy prices are coming down real hard on fears of a global recession," said Linda Duessel, equity strategist at Federated Investors Inc. "The fact that the price of oil keeps coming down really underlines it's global, and it's severe."

The depth of the recession could be seen in recent economic data as well.

"When you look at the reports this week, trade balance, the decline in retail sales, the decline in import prices, you realize how deeply mired the U.S. economy is in a recession," said Hugh Johnson, chairman of Johnson Illington Advisors. "It requires the help of the Federal Reserve, and we've gotten some; it requires the help of government, and it appears it needs more help, and more help is on the way. The problem is nobody knows if it'll work, [and] nobody knows what the formula is for ending it."

Citigroup (C), off 23% to below $5, led a retreat that sank all 30 components of the Dow Jones Industrial Average (DJI). The blue-chip index plummeted to early December lows, while extending its recent losing streak to a sixth consecutive session.

Citi's steep drop followed reports it would soon reveal a plan to unload several businesses and reduce its size by one-third, effectively dismantling the old, sup-sized Citi model.

Especially hard hit, energy shares furthered their decline after data had U.S. heating-oil inventories climbing more than expected. Shares of Consol Energy Inc. (CNX), National Oilwell Varco Inc. (NOV), Valero Energy Corp. (VLO) and Peabody Energy Corp. (BTU) were all down about 10%.

Financial shares were also targeted. Huntington Bancshares Inc. (HBAN) declined 16%, CIT Group Inc. (CIT) lost nearly 15% of its market valuation, while Developers Diversified Realty (DDR) and Lincoln National Corp. (LNC) were also among those slammed by double-digit declines.

Shares of HSBC Holdings PLC (HBC) fell to near 10-year lows after analysts at Morgan Stanley wrote a research note challenging the perception that HSBC, Europe's largest bank, is among the world's strongest.

J.P. Morgan Chase & Co. (JPM) moved the release of its quarterly results up to Thursday morning, nearly a week ahead of schedule, with a spokesman for the bank declining to comment on why the company was making the move.

"As a sector [financials], after a several-decade bull market, now it's going to pay the piper, and be heavily regulated to survive," said Duessel.

Johnson likens the current financial crisis to the Panic of 1907, when the New York Stock Exchange plunged nearly 50% from its peak the previous year. The crisis was stemmed after the intervention of financier J.P. Morgan, who committed his own money and led an effort that also had the Treasury making large deposits in troubled banks.

"They did that again, again and again, injecting liquidity into the financial system, and all of a sudden, confidence turned on a dime," said Johnson.

"The retail sales are bad news, but the real question is what is going to happen in the first three quarters. A lot depends on what the Fed does, what the Obama administration does, and even if they do a lot, we don't know if and when it will work, just like in 1907," said Johnson.

Unplugged

The consumer-discretionary category fell as well, with companies from AutoNation Inc. (AN) to upscale retailer Nordstrom Inc. (JWN) hammered, the former 9.8%.

The government's separate reports showing twice the expected decline in retail sales in December, along with a 4.2% drop in import prices, illustrated the economic horror of the holiday shopping season as well as reduced demand for goods as Americans cut back. .

Utilities declined the least among the S&P's 10 industry groups, bolstered by FirstEnergy Corp. (FE) and CMS Energy Corp. (CMS), both up about 1%.

Defensive plays -- health care and consumer staples -- were also spared the worst of the damage, with pharmaceuticals including Baxter International Inc. (BAX) and Bristol-Myers Squibb Co. (BMY) managing to eke out gains amid the bloodshed.

Medical device maker Allergan Inc. (AGN) led gains among health-care companies on the S&P, finishing up 3.6%.

"An area of resilience continues to be the health and personal care sector. Sales in this category increased 0.4% following a 0.5% increase in November and they have not fallen in a year," said Tony Crescenzi, bond market strategist at Miller Tabak & Co.

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