Wall Street extended its decline Thursday, dipping lower after the Labor Department said productivity was flat in the third quarter while wages rose nearly 4 percent. The data touched off concerns that the Federal Reserve will continue to wrestle with inflation, possibly raising interest rates again.

The Dow Jones industrial average posted its first five-day consecutive decline since June 2005 following the economic news and amid mixed reports from retailers on October sales, including Wal-Mart Stores Inc. (WMT), which had disappointing results last month and warned that November sales would also come in below expectations.

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The economic data, which showed wage pressure was increasing at the fastest rate in more than 20 years, rattled investors who have grown concerned that the economy might be cooling too quickly. Wall Street wants a gradual slowdown so the Fed will cut interest rates.

One market observer wasn't worried, noting that the decline was modest. "In the grand scheme of what's happened today and this week I'd say the markets are hanging in there," said Brian Williamson, an equity trader at The Boston Company Asset Management.

The Dow, which fell below the 12,000 benchmark during the session, closed down 12.48, or 0.10 percent, at 12,018.54.

Broader stock indicators also declined modestly. The Standard & Poor's 500 index fell 0.47, or 0.03 percent, to 1,367.34, and the Nasdaq composite index declined 0.33, or 0.01 percent, to 2,334.02.

Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.60 percent from 4.57 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell 83 cents to $57.88 a barrel on the New York Mercantile Exchange. Oil prices, whose decline had given a boost to stocks during their three-month rally, dropped in recent days but largely failed to prop up investor sentiment in the face of economic news.

Meanwhile, the Labor Department said the number of newly laid off workers seeking unemployment benefits rose last week to its highest level in more than three months.

Investors appeared unfazed by a Commerce Department report that showed factory orders rose a lower-than-expected 2.1 percent in September.

Similarly, the markets showed little reaction to comments by Dallas Federal Reserve President Richard Fisher who said in a speech in New York that while overall inflation remains high it is possible that inflation has peaked and is "finally heading lower." Fisher is a nonvoting member of the Fed's Open Market Committee, which sets short-term interest rates.

While the markets haven't fallen sharply this week — the S&P is down the most at 0.73 percent — the moves are eating into gains seen in a robust October, when the Dow, S&P and Nasdaq each rose more than 3 percent on expectations that a soft landing was indeed under way. The week's trading indicates that investors are feeling less secure about where the economy is headed.

However, some investors viewed Thursday's data as typical of the type of slowdown the Fed envisions. T.J. Marta, economic strategist at RBC Capital Markets, sees the rising labor costs for the third quarter and an upward revision for the second quarter as unnerving to many investors but said the Fed needs to see such evidence to justify a rate cut. "The Fed is trying to engineer a slowdown so this is all good. The plane is coming in for a landing."

Among retailers, Wal-Mart fell 56 cents to $48.29 after reporting it expects same-store sales, or sales at stores open at least a year, to be flat in November.

Wal-Mart's disappointing news raised questions about whether the experiences of the world's largest retailer indicated trouble ahead. With the holiday season approaching, Wall Street is hoping robust consumer spending will serve as a counterpoint to weak economic readings — from gross domestic product to consumer spending — that have been seen in recent days. However, investors had bet that gas prices, which are down sharply from their year highs in July, would leave consumers eager to spend the extra money in their wallets. October sales results didn't seem to bear that out.

Sharper Image Corp. fell $1.36, or 12.3 percent, to $9.67 after issuing a disappointing sales report, while specialty retailer Limited Brands Inc. (LTD) rose 85 cents, or 3 percent, to $29.66 after posting stronger-than-expected results for October.

Hot Topic Inc. advanced 67 cents, or 6.8 percent, to $10.49 after the teen clothing retailer reported a wider-than-expected decline in same-store sales but predicted its fourth-quarter profit would likely be above what Wall Street had been expecting.

Declining issues outnumbered advancers by about 9 to 7 on the New York Stock Exchange, where volume came to 1.67 billion shares compared with 1.80 billion traded Wednesday.

The Russell 2000 index of smaller companies fell 2.02, or 0.27 percent, to 750.13.

Overseas, Japan's Nikkei stock average closed down 0.15 percent. Britain's FTSE 100 closed essentially flat, Germany's DAX index was down 1.09 percent, and France's CAC-40 was down 1.13 percent.

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