Triple-digit selloff on Dow
Wall Street retreats on weaker-than-expected economic news, while Goldman Sachs and J&J report surprisingly better quarterly results.
NEW YORK (CNNMoney.com) -- Stocks slumped Tuesday, after a weaker-than-expected retail sales report gave investors a reason to retreat following a five-week run.
The Dow Jones industrial average (INDU) lost 137 points, or 1.7%. The S&P 500 (SPX) index lost 17 points, or 2%. The Nasdaq composite (COMP) lost 27 points, or 1.7%.
Stocks have been on the rise for five straight weeks on bets that the worst for the economy and financial sector has already happened. But with consumer spending a big driver of the economy, the weak retail sales report caused fresh concern among investors.
"The retail sales report was a factor, but I also just think the market had to breathe a little bit after the run we've seen," said Ron Kiddoo, chief investment officer at Cozad Asset Management.
Stocks were already vulnerable to a retreat after the recent rally lifted the Dow 22%. It was the blue-chip barometer's best five-week run since May 1933, when it gained 31%.
The advance followed a downturn that left the Dow and S&P 500 at more than 12-year lows, as of March 9.
Kiddoo said that those lows will likely withstand further selloff attempts, but that supposed market bottoms made in the fall proved to be false floors.
"It seems like this time is different because you're seeing a little better attitude now," he said. "Most of the people who were going to bail, have bailed already."
In corporate news, Goldman Sachs (GS, Fortune 500) reported a better-than-expected quarterly earnings report late Monday, making it the second financial firm to surprise to the upside. But investors sent shares lower nonetheless, with the stock having spiked 54% year-to-date prior to the Monday announcement.
Last week, Wells Fargo (WFC, Fortune 500) forecast a nearly $3 billion quarterly profit.
Wednesday preview: After the close, Intel (INTC, Fortune 500) reported weaker quarterly sales and earnings that topped expectations. The company's chief executive also said that he thinks PC sales bottomed in the first quarter and that the industry is returning to "normal seasonal patterns."
Wednesday morning brings government reports on consumer prices, industrial production and capacity utilization and weekly energy supplies. In the afternoon, the Fed releases its "Beige Book" a periodic reading on the economy. Wednesday is also the deadline for income tax returns.
Retail sales: Retail sales fell 1.1% in March after rising a revised 0.3% in February. Economists surveyed by Briefing.com thought sales would rise 0.3%. Sales excluding volatile autos rose 0.9% after jumping a revised 1% in the previous month. Economists thought sales would be unchanged.
The retail sales report underscores the volatility of the data right now, said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc.
"The consumer fell out of bed at the end of last year, we had a bounce in January, February didn't do much and March was bad," he said. "But why expect the consumer to have suddenly recovered when the economy hasn't yet recovered?"
Economy: In addition to retail sales, reports were released on wholesale inventories and business inventories.
The Producer Price index (PPI) fell 1.2% in March after rising 0.1% in the previous month. Economists expected PPI to be unchanged. The so-called "core" PPI, which strips out volatile food and energy prices, was unchanged after rising 0.2% in the previous month. Economists thought it would increase 0.1%.
February business inventories fell 1.3% after falling 1.3% in the previous month. Economists surveyed by Briefing.com thought inventories would fall 1.2%.
In other news, Federal Reserve Chairman Ben Bernanke said Tuesday that there are "tentative signs" that the economy's slide is slowing, but that a full recovery won't come until the financial sector stabilizes.
President Obama spoke Tuesday about his administration's efforts to stabilize and recharge the economy. He warned about unpopular choices when it comes to restructuring the auto industry and American International Group (AIG, Fortune 500).
Results: Goldman Sachs released better-than-expected quarterly profits late Monday, earning $3.39 per share on revenue of $9.43 billion. The company also said it plans to raise $5 billion through a stock offering to be used toward paying back its $10 billion government loan. Shares fell 11.6% Tuesday.
Other financial shares slipped too, sending the KBW Bank (BKX) index down 8.1%.
On Tuesday morning, Dow component Johnson & Johnson (JNJ, Fortune 500) reported weaker quarterly earnings that nonetheless topped estimates. Shares were little changed.
Market breadth was negative. On the New York Stock Exchange, losers beat winners by more than seven to three on volume of 1.75 billion shares. On the Nasdaq, decliners topped advancers two to one on volume of 2.29 billion shares.
Bonds: Treasury prices rose, lowering the yield on the benchmark 10-year note to 2.78% from 2.82% Monday. Treasury prices and yields move in opposite directions.
Other markets: In global trading, Asian markets ended higher, with the exception of the Japanese Nikkei and European markets ended higher.
In currency trading, the dollar gained versus the euro and fell against the yen.
U.S. light crude oil for May delivery fell 64 cents to settle at $49.41 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery fell $3.80 to settle at $892 an ounce. 
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