By Abhiram Nandakumar
(Reuters) - U.S. stocks retreated on Wednesday as investors absorbed mixed earnings from major banks and Wal-Mart's weak forecast wiped more than $20 billion off the retailer's market value.
Weak economic data from the United States and China added to worries about the health of the global economy even as investors' focus shifted to company results.
"The major theme, not only today but through the balance of the earnings season, is going to be the revisions to fourth quarter and 2016 earnings," said Bill Northey, chief investment officer of the private client group at U.S. Bank.
Wal-Mart sank 8.6 percent to $60.99, on track for its worst one-day performance in more than 17 years, after the retailer said the strong dollar was likely to take $15 billion out of its full-year revenue.
The stock was the biggest drag on the Dow Jones industrial average, shaving off 38 points off the index, and pulled down the S&P consumer discretionary and consumer staples sector.
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"It's an earnings driven market and so those revisions and the color that we get from company commentary is going to be incredibly important in terms of driving the direction of the market, not only for the next couple of weeks, but really over the next year," Northey said.
S&P 500 companies are expected to report a 4.2 percent decline in third-quarter profit, the biggest in six years, according to Thomson Reuters data.
JPMorgan shares fell 3.2 percent to $59.61, a day after the bank reported third-quarter results that fell short of estimates.
Wells Fargo fell 1.7 percent to $50.98 after reporting results. Bank of America rose 1.5 percent to $15.75 after the bank reported a profit, compared with a year-earlier loss.
At 11:24 a.m. ET (1524 GMT), the Dow Jones industrial average was down 120.53 points, or 0.71 percent, at 16,961.36, the S&P 500 was down 9.18 points, or 0.46 percent, at 1,994.51 and the Nasdaq Composite was down 20.28 points, or 0.42 percent, at 4,776.33.
Six of the 10 major S&P sectors fell.
Data on Wednesday showed that consumer inflation in China rose less than expected, while retail sales in the United States barely rose in September.
The Federal Reserve, which has not raised rates since 2006, has said it will wait for clear signs of economic stability before it pulls the trigger.
Sandisk surged 10.2 percent to $68.01 on a Bloomberg report that Micron Tech and Western Digital were in talks to buy the memory chip maker. Micron rose 2.8 percent.
TripAdvisor soared 20.6 percent to $80.42 after the company announced a room-booking deal with Priceline.
Declining issues outnumbered advancing ones on the NYSE by 1,703 to 1,146. On the Nasdaq, 1,546 issues fell and 1,013 advanced.
The S&P 500 index showed five new 52-week highs and three new lows, while the Nasdaq recorded 16 new highs and 39 new lows.
(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Don Sebastian and Saumyadeb Chakrabarty)