Stocks take a thumping

Dow down 184 points and Nasdaq tumbles 3% as a weaker-than-expected retail sales report triggers an investor retreat.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Alexandra Twin, senior writer

How is the paycheck stimulus tax break affecting your economic situation?
  • It's helpful
  • It's not a big deal
  • I don't get the break

NEW YORK( -- Stocks tumbled Wednesday, with the Nasdaq and S&P 500 falling for a third straight session, after a weaker-than-expected retail sales report gave investors a reason to retreat.

The Dow Jones industrial average (INDU) lost 184 points, or 2.2%. The S&P 500 (SPX) index fell 24 points, or 2.7%. The Nasdaq composite (COMP) dropped 52 points, or 3%.

The worse-than-expected retail sales dragged on stocks, said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research. He said investors were also a little jittery about the bevy of banks rushing to raise capital to pay back the government bailout money they received.

"We were due for a pause here and with questions about the consumer and the banks, investors are finding an excuse to take some profits," he said.

Stocks seesawed Tuesday as investors showed caution after a roughly 2-month rally that propelled all the major stock gauges by at least 30%. That hesitation remained in place Wednesday.

Stocks have risen since early March on bets that the economy is close to turning a corner.

"I think the momentum has gotten a little ahead of itself," said Robert Loest, portfolio manager at Integrity Funds. "We've run out of good news for the time being."

He said that later in the year, there will be more positives for investors to key off of, as fourth-quarter earnings are bound to show improvement versus abysmal results a year earlier. Additionally, the impact of the government putting trillions of dollars into the economy will have an impact.

Thursday brings the government's April Producer Price index and the weekly jobless claims index. Also Thursday, Wal-Mart Stores (WMT, Fortune 500) is due to report quarterly results before the start of trade. Wal-Mart is expected to have earned 77 cents per share versus 76 cents a year earlier.

Economy: Retail sales fell 0.4% in April, according to a report from the Commerce Department released before the market open. Sales were expected to hold steady, according to a consensus of economists surveyed by Sales fell a revised 1.3% in March.

Sales excluding volatile autos fell 0.5% in April, after dropping 1.2% in the previous month. Economists forecasts had called for a rise of 0.2%.

The number of U.S. households facing foreclosure jumped 32% in April versus a year ago, according to RealtyTrac. More than 342,000 homes received notices of default in the month, up 1% from March.

In other economic news, March business inventories fell 1% after slipping 1.4% in the previous month. Economists expected inventories to have dropped 1.1%.

Company news: AIG (AIG, Fortune 500) shares declined as the company's CEO discussed restructuring plans at a House hearing about how the company plans to pay back billions in government loans. Shares rose 11.6%.

In other news, Intel (INTC, Fortune 500) was fined a record $1.45 billion by the European Union for allegedly anti competitive practices, a decision the chipmaker plans to appeal. Shares fell.

Freddie Mac (FRE, Fortune 500) posted a $9.9 billion quarterly loss after the market close Tuesday and also asked the government for another $6.1 billion in aid. Shares fell 7%.

GM (GM, Fortune 500) shares started the day with another drop on concerns that it will have to file for bankruptcy, with the stock touching $1 per share, the lowest level since 1933. But GM rallied in the afternoon to finish 6 cents higher at $1.21.

Market breadth was negative. On the New York Stock Exchange, losers topped winners eight to one on volume of 1.76 billion shares. On the New York Stock Exchange, decliners beat advancers by almost six to one on volume of 2.42 billion shares.

Bonds: Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.11% from 3.17% Tuesday. Treasury prices and yields move in opposite directions.

Other markets: In global trading, Asian markets ended mixed, while European markets ended lower.

In currency trading, the dollar gained versus the euro and the yen.

U.S. light crude oil for June delivery fell 83 cents to settle at $58.02 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery climbed $2 to settle at $925.90 an ounce. To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.