Stocks decline after retail, unemployment data
Joe Bel BrunoWall Street fell sharply in early trading Thursday after retailers posted sluggish back-to-school sales reports and the government said the number of workers seeking unemployment benefits spiked last week.
Investors, still wary about the overall state of the economy, are feeling uneasy after many of the nation's retailers said shoppers curtailed spending last month due to higher gas and food prices. Wal-Mart Stores Inc., the world's largest retailer, beat Wall Street projections because of its discounts.
Meanwhile, the Labor Department said new applications for unemployment insurance rose by 15,000 from the previous week. That broadly missed expectations for a fourth-straight week of declines.
Crude prices rose as Wall Street waited to see if a weekly U.S. inventory report would contain evidence that slowing economic growth has cut demand. The Energy Department is scheduled to release its report on oil stockpiles for the week ended Aug. 29 later in the session.
A barrel of light sweet crude rose 21 cents to $109.56 a barrel on the New York Mercantile Exchange. It dipped below $108 a barrel on Wednesday.
Investors are also awaiting a report that is expected to show the nation's service sector improved slightly last month.
The Institute for Supply Management, a trade group of purchasing executives, is expected to report at 10 a.m. EDT that its service sector index rose to 50.0 from 49.5 in July, according to Wall Street economists surveyed by Thomson/IFR. Any reading above 50 signals growth, while a reading below 50 indicates contraction.
In early trading, the Dow Jones industrial average fell 127.91, or 1.11 percent, to 11,404.97.
Broader indexes were also lower. The Standard & Poor's 500 index fell 8.28, or 0.65 percent, to 1,266.70; the Nasdaq composite index dropped 18.92, or 0.81 percent, to 2,314.81.
Bond prices moved higher Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.68 percent from 3.70 percent late Wednesday.
In corporate news, Wal-Mart said sales of groceries and back-to-school products helped its August same-store sales rise 3 percent, beating expectations. Shares rose 55 cents to $60.33.
Toll Brothers Inc. shares fell 72 cents, or 3.4 percent, to $23.97 after the home builder reporter it swung to a third-quarter loss as sales fell amid the housing slump.
The Russell 2000 index of smaller companies fell 4.85, or 0.65 percent, to 737.06.
Overseas, the Bank of England and European Central Bank left their benchmark interest rates unchanged, a move analysts expected as both face rising inflation and slowing economic growth. Britain's FTSE 100 rose 0.53 percent, Germany's DAX index fell 1.64 percent, and France's CAC-40 shed 1.25 percent. Japan's Nikkei stock closed down 1.04 percent.
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