U.S. stocks cut losses amid negative data

U.S. stocks saw a late-day rebound but still closed in red territory Wednesday amid weak economic data from home and abroad.

The Dow Jones Industrial Average slumped 173.45 points, or 1.06 percent, to 16,141.74. The S&P 500 fell 15.21 points, or 0.81 percent, to 1,862.49. The Nasdaq Composite Index dropped 11.85 points, or 0.28 percent, to 4,215.32.

The blue-chip Dow was down as much as 460 points before recouping most of earlier losses in the late afternoon session.

U.S. economic data came out downbeat in the morning, exacerbating investors' worries over global economic growth.

U.S. retail and food services sales for September slipped 0.3 percent, said the U.S. Commerce Department. The decline was bigger than market consensus of a 0.2 percent drop.

U.S. business inventories rose 0.2 percent for August, also lower than market expectations of a 0.4 percent increase, the department said in a separate report Wednesday.

Adding to woes in the market, the growth of manufacturing activity in the New York region slowed significantly in October, with the Empire State general business conditions index plunging to 6.2 from a five-year high of 27.5 in September, said the Federal Reserve Bank of New York.

Moreover, the U.S. Producer Price Index for final demand unexpectedly fell 0.1 percent in September on a seasonally adjusted basis, said the U.S. Labor Department on Wednesday. The decline of U.S. wholesale prices was the first in more than a year and missed analysts' expectations of a 0.1-percent increase, a sign that the U.S. economic growth is not as robust as expected.

Overseas data also added to negative sentiment on Wall Street. German Consumer Price Index remained unchanged in September from the prior month thanks to falling energy prices, the Federal Statistical Office of Germany said Wednesday, increasing fears over deflation in the euro area.

China's consumer inflation in September also eased to an over four-year low, official data showed Wednesday.

However, the so-called Beige Book released by the Federal Reserve in the afternoon comforted investors a little bit by saying that the 12 Fed Districts are generally witnessing "modest to moderate economic growth" at a pace similar to that noted in the previous book.

The sharp slump in the earlier session lured some investors with appetite for risk to buy the dip in the late session, which slashed stock losses.

On the previous trading day, the S&P 500 and the tech-rich Nasdaq snapped their three-day rout with modest gains, while the Dow extended its losses into a fourth session, as decent earnings from major U.S. banks eased some concerns about global growth worries.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, soared 15.18 percent to end at 26.25 on Wednesday.

In other markets, U.S. crude prices extended losses on negative economic data around the world, after seeing biggest daily drops in two years.

Light, sweet crude for November delivery dropped 6 cents to settle at 81.78 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for November delivery shed 1.26 dollars to close at 83.78 dollars a barrel.

Gold futures on the COMEX division of the New York Mercantile Exchange continued to rise on lukewarm economic data, with the most active gold contract for December delivery up 10.5 dollars, or 0.85 percent, to settle at 1,244.8 dollars per ounce.

The U.S. dollar fell against major currencies on weak U.S. economic data. In late New York trading, the euro increased to 1. 2778 dollars from 1.2645 dollars in the previous session, and the dollar bought 106.01 Japanese yen, lower than 106.99 yen of the previous session.