NEW YORK, Jan. 14 (Xinhua) -- U.S. stocks lost ground on Wednesday as more-than-expected drop in retail sale and downbeat outlooks for big banks exacerbated worries about the economy.

    Tumbling banking sector led the Standard & Poor's financial index down 4.9 percent. All 30 Dow components lost ground.

    Deutsche Bank AG, Germany's biggest bank, reported a record loss of 4.8 billion euros (about 6.3 billion U.S. dollars) in the fourth quarter.

    Morgan Stanley said that HSBC Holdings, Europe's largest bank by market value, may have to raise as much as 30 billion U.S. dollars and cut the dividend in half.

    Citigroup, which closed a deal with Morgan Stanley on Tuesday on a new joint venture of brokerage, tumbled 14 percent Wednesday. Investors are worried that Citigroup still needs to raise more capital. Citigroup is estimated to report an operating loss of 10 billion dollars in the fourth quarter.

    A government report released on Wednesday showed that consumer spending contracted much more than the market had predicted. The U.S. Commerce Department reported that retail sales dropped 2.7 percent in December 2008, more than double the 1.2 percent decline that Wall Street had expected.

    It is the record sixth straight monthly decline, as American consumers cut back on everything against credit crunch and job losses. The dismal retail sales plagued investors, because consumer spending accounted for more than two third of the nation's economy.

    Crude oil fell more than 5 percent 35.72 dollars a barrel on the New York Mercantile Exchange as the concern over slumping demand weighed on the market. Energy shares went lower.

    The Dow Jones fell 248.42, or 2.94 percent, to 8,200.14. Broader indexes also went down sharply. The Standard & Poor's 500 index slipped 29.17, or 3.35 percent, to 842.62; and the Nasdaq tumbled 56.82, or 3.67 percent, to 1,489.64.