Stocks Hurt By Weak Retail Reports, Economic Data

U.S. stocks slumped Thursday as disappointing retail sales and a widening trade deficit aroused worries about the economy a day after the Federal Reserve expressed continued concerns about inflation.

The Dow Jones industrial average was down 147.74 points, or 1.11 percent, at 13,215.13. The Standard & Poor's 500 Index was down 21.11 points, or 1.4 percent, at 1,491.47. The Nasdaq Composite Index was down 42.60 points, or 1.65 percent, at 2,533.74.

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Of the 30 Dow stocks, only four closed higher.

Stocks sensitive to economic growth, including energy companies such as Exxon Mobil (XOM) and manufacturers including Caterpillar (CAT), led the decline.

After a string of record highs for blue chips in recent weeks, investors locked in profits triggering the steepest one-day percentage decline on the major Wall Street indexes in two months.

U.S. retailers reported the weakest April sales results on record, after cold, stormy weather coupled with an earlier Easter holiday than a year ago and some chain stores cutting their earnings forecasts.

Federated Department Stores Inc. (FD), the parent of Macy's and Bloomingdale's, was among the majority of retailers reporting sales that missed expectations, sending its shares tumbling.

"Today's downturn is a combination of retail sales numbers being weak and the fact the Federal Reserve did not provide any further hints that it's getting closer to lowering interest rates yesterday," said Michael Sheldon, chief market strategist at Spencer Clarke in New York.

"The market's performance today doesn't mean it is falling apart. But in the very near term we may see some profit taking and hesitation as investors await more economic data."

Among other economic reports that unnerved investors, the U.S. trade data showed imports rose to the second highest level on record in March, driven by higher oil prices.

The government also reported April import prices — an inflation gauge used by the Federal Reserve — rose more than expected, while export prices posted a smaller-than-forecast gain.

Shares of Amgen Inc. and Johnson & Johnson slid after a U.S. advisory panel called for marketing restrictions on popular anemia drugs sold by the companies. Amgen shares slid 9.14 percent to $57.33, making it the biggest drag on the Nasdaq, while Johnson & Johnson fell 2.51 percent to $62.50.

Children's Place, Pacific Sunwear of California Inc. and New York & Co. Inc. were among retailers who cut their first-quarter earnings forecast after reporting April sales. Children's Place shares were down 2.56 percent to $52.09, while Pacific Sun stock shed 0.91 percent to $20.58.

Federated Department Stores shares fell 3.93 percent to $42.10 while Wal-Mart shares were down 0.38 percent at $47.75 on the NYSE.

Caterpillar's shares fell 1.26 percent to $73.81 and Exxon Mobil's shares closed 2.07 percent lower at $79.39.

Trading was light on the NYSE, with about 1.53 billion shares changing hands, below last year's estimated daily average of 1.84 billion. On Nasdaq, about 2.24 billion shares traded, above last year's daily average of 2.02 billion.

Declining stocks outnumbered advancing ones by a ratio of about 4 to 1 on the NYSE and Nasdaq.

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