NEW YORK » Volatility is reasserting itself in the stock market.

A darkening outlook for companies from banks to retailers to energy producers pummeled Wall Street yesterday, sending the Dow Jones industrials down nearly 250 points, or 2.94 percent, and giving the other major indexes a loss of more than 3 percent.

A weak government report on retail sales touched off some of the market's latest turbulence. Wall Street knew retailers' cash registers weren't busy this holiday season but the report was much worse than anticipated. The department said retail sales dropped 2.7 percent last month, more than double the 1.2 percent decline analysts forecast.

Many analysts predict the year-old recession, already the longest in a quarter-century, will persist at least until late this year - and those disheartening forecasts are bringing sellers back to the market after a late-year rally.

Deutsche Bank AG's announcement that it lost an estimated $6.4 billion in the fourth quarter intensified the market's concerns that banks in general are still suffering and will need more government help.

Yesterday, the Dow fell 248.42, or 2.94 percent, to 8,200.14. All 30 stocks that make up the Dow fell.

The S&P 500 fell 29.17, or 3.35 percent, to 842.62.

The Nasdaq composite index fell 56.82, or 3.67 percent, to 1,489.64.

The Russell 2000 index of smaller companies fell 20.62, or 4.35 percent, to 453.17.

Only 314 stocks rose on the New York Stock Exchange, while 2,796 fell. Volume came to a light 1.42 billion shares.

Bond prices rose yesterday as stocks fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.20 percent from 2.30 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, fell to 0.10 percent from 0.12 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude declined 50 cents to settle at $37.28 a barrel on the New York Mercantile Exchange.

The U.S. Commerce Department said businesses cut inventories in November by the largest amount in seven years as companies tried to cope with a record plunge in sales. It was the third straight month that businesses have reduced their stockpiles.

Citigroup Inc., which announced Tuesday it would give control of its Smith Barney brokerage business to Morgan Stanley, could soon shrink itself by one-third, according to a Wall Street Journal report yesterday.