Stocks move lower on tepid retail sales
NEW YORK » Nervous investors bid stocks modestly lower yesterday as disappointing retail sales reports prompted fresh concerns about a slowdown in the economy and a dropoff in corporate revenues. A surge in oil prices also spurred selling.
While many big-name retailers reported solid, if uninspiring, sales for February, the majority of monthly retail sales were below Wall Street's expectations -- a disturbing sign for investors who hope consumer spending will remain robust in the face of expected interest rate increases from the Federal Reserve.
"The economy is slowing, not to the point where anybody's really worried, but if corporate profits slow along with it, you're going to want to see the Fed finish up with rate hikes," said Russ Koesterich, senior portfolio manager at Barclays Global Investments in San Francisco. "But the Fed is going to err on the side of inflation. So the one catalyst that could move the markets out of this trading range doesn't seem to be there right now."
The Dow Jones industrial average fell 28.02, or 0.25 percent, to 11,025.51.
Broader stock indicators also fell. The Standard & Poor's 500 index lost 2.10, or 0.16 percent, to 1,289.14, and the Nasdaq composite index dropped 3.53, or 0.15 percent, to 2,311.11.
Bonds fell for a second straight session, with the yield on the 10-year Treasury note rising to 4.64 percent from 4.59 percent late Wednesday. The dollar lost ground against other major currencies, while gold prices rose.
Unrest in oil-producing regions as well as higher natural gas prices helped boost crude futures. A barrel of light crude settled at $63.36, up $1.39, on the New York Mercantile Exchange.
The retail worries overshadowed another sign of strength in the labor market. First-time jobless claims rose by 15,000 last week to 294,000, according to the Labor Department. The small increase kept claims below 300,000 for the seventh straight week.
The claims data, however, did not provide any additional clarity on the overall economy. The week's economic data, while plentiful, has been mixed, leaving investors with their uncertainties about economic growth and prompting what Arthur Hogan, chief market analyst at Jefferies & Co., called a knee-jerk reaction to each new bit of data.
"You look at the past three days, we're down, up and down again," Hogan said.
"Without any real catalyst, and really, without knowing what the Fed will do, we're going to bounce around here for a while."