Retail sales reports push stocks lower

Stocks tumbled on disappointing retail sales and a rise in oil prices Thursday as investors, worried about oil’s impact on consumer spending, took profits from the market’s July rally.

Many of the nation’s retailers reported only modest sales gains as hot weather stifled demand for fall fashions and as many consumers spent their money at auto dealers instead of malls. But investors nonetheless were wondering whether retailers’ results were a sign that consumers might finally be feeling the pinch from high gasoline and energy prices.

Those concerns were exacerbated by another rise in crude oil futures, which once again neared all-time highs. A barrel of light crude settled at $61.38, up 52 cents on the New York Mercantile Exchange.

However, with stocks still near four-year highs, analysts said the selloff was unlikely the start of a major downward trend.

“I think you’re seeing some movement on the retail sales and oil, but I don’t think it’s meaningful,” said Kurt Wolfgruber, chief investment officer at Oppenheimer Funds. “I still think this market will grudgingly go up.”

The Dow Jones industrial average fell 87.49, or 0.82 percent, to 10,610.10.

Broader stock indicators also lost ground. The Standard & Poor’s 500 index dropped 9.18, or 0.74 percent, to 1,235.86, and the Nasdaq composite index lost 25.49, or 1.15 percent, to 2,191.32.

Bonds traded in a narrow range, with the yield on the 10-year Treasury note rising to 4.31 percent from 4.30 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.

The sales reports and oil worries overshadowed a positive employment report from the Labor Department. First-time jobless claims fell by 1,000 last week to 312,000. The news bodes well for Friday’s monthly job creation report. Economists expect the economy to have created 186,000 jobs in July.

While the latest retail sales reports weren’t alarming — especially since they followed a robust June — there were enough companies reporting disappointing sales to keep investors on edge. Among those retailers whose sales fell below analysts’ estimates, Aeropostale Inc. tumbled $2.24 to $27.11, Limited Brands Inc. fell 68 cents to $24.35 and Pier 1 Imports Inc. was down 50 cents at $13.68.

Declining issues outnumbered advancers by more than 2 to 1 on the New York Stock Exchange, where preliminary consolidated volume came to 1.96 billion shares, compared with 2.01 billion on Wednesday.

The Russell 2000 index of smaller companies fell 11.54, or 1.69 percent, to 671.84.

Japan’s Nikkei stock average fell 0.82 percent. In Europe, Britain’s FTSE 100 closed down 0.32 percent, France’s CAC-40 dropped 0.81 percent for the session, and Germany’s DAX index lost 1 percent.