Stocks fall on so-so economic news, Iraq turmoil

Published on NewsOK Modified: June 12, 2014 at 4:03 pm •  Published: June 12, 2014
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NEW YORK (AP) — A combination of so-so economic news and violence in Iraq helped push the stock market sharply lower Thursday.

Stocks fell from the start of trading on a government report that retail sales for May came in slightly lower than expected. A separate report on jobs was weak, too. A surge in oil prices as violence flared in Iraq also weighed on the market, and hammered airline stocks.

For the Standard and Poor's 500, it was the third down day in a row, a reversal of sorts from steady, if unremarkable, rises for much of the year. The index is heading for its first weekly loss in four weeks.

Uri Landesman, president of hedge fund Platinum Partners, said the pullback wasn't surprising. Investors had gotten too complacent about the S&P 500's steady rise this year. The index is up 4.4 percent following a remarkable 30 percent increase in 2013.

"It's time for profit taking, taking risk off the table," he said. "It's very rare that markets move up in a straight line."

The Dow Jones industrial average fell 109.69 points, or 0.7 percent, to 16,734.19. The Nasdaq shed 34.30 points, or 0.8 percent, to 4,297.63. The S&P 500 was down 13.78 points, or 0.7 percent, to 1,930.11.

In the retail report, the Commerce Department said U.S. sales rose 0.3 percent last month, helped by a surge in auto demand. That was the fourth straight month of gains, but shy of the 0.4 percent increase that economists expected.

The Labor Department said that weekly applications for unemployment benefits rose 4,000 to a seasonally adjusted 317,000.

"The data today was a little unfulfilling," said Lawrence Creatura, a portfolio manager at Federated Investors. Still, he is optimistic in the face of the selling because he believes the economy is generally strengthening. "We're definitely not flinching. We're holding our positions."

Energy stocks rose broadly after insurgents captured two cities in Iraq, raising the specter of disrupted global oil supplies. The price of oil rose $2.13, or 2 percent, to $106.53. Diamond Offshore Drilling climbed $1.89, or 4 percent, to $48.77, making it the second-biggest gainer in the S&P 500.