By Kate Gibson

Financial shares, led by the wounded giant Citigroup Inc., paced Wednesday's market slide, with energy and consumer discretionary shares adding to the sharp retreat after the latest confirmations of a deepening recession.

"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."

Off more than 18% to below $5 a share, Citigroup (C) led a retreat that sank all 30 components of the Dow Jones Industrial Average (DJI), with the index plummeting to early December lows.

Huntington Bancshares Inc. (HBAN), Developers Diversified Realty (DDR) and Lincoln National Corp. (LNC) were also 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 the bank, Europe's largest, 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.

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

Already down, energy shares fell further after data had U.S. heating-oil inventories climbing more than expected. Shares of Consol Energy Inc. (CNX), National Oilwell Varco Inc. (NVD), Valero Energy Corp. (VLO) and Peabody Energy Corp. (BTU) all fell nearly 10%.

The consumer-discretionary category fell as well, with companies from Goodyear Tire & Rubber Co. (GT) to upscale retailer Nordstrom Inc. (JWN) hammered, each lately down more than 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. .

Defensive plays -- health care and consumer staples - were 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, lately up 2.1%.

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