Stocks fall after drop in retail, financial shares

NEW YORK -- A late-day slide left stocks lower Thursday following a disappointing forecast from department store chain Kohl's and a drop in financial shares.

The Dow Jones industrial average ended down about 114 points after shooting up by nearly 149 on Wednesday. Stocks mostly made modest moves for much of Thursday's trading but fell in the final hour. The drop signaled that traders remain on edge and not sure about the market's direction.

Kohl's Corp. slid 5.8 percent and dragged other consumer stocks lower after its increased forecasts fell short of what analysts had been expecting.

Bank stocks fell on reports that New York's attorney general is examining eight banks to determine whether they misled ratings agencies about mortgage securities.

Tech shares also got hit after investors saw a forecast from computer networking equipment Cisco Systems Inc. as cautious. The stock fell 4.5 percent to post the steepest drop among the 30 stocks that make up the Dow.

While a fourth straight weekly decline in claims is a welcome sign, it hasn't been enough to signal sustainable job growth. Economists estimate weekly initial claims need to fall below 425,000 to show employers are consistently adding workers. Claims have stalled around the 450,000 level throughout the year.

High unemployment remains a major obstacle to a strong recovery. The unemployment rate jumped to 9.9 percent last month, although employers added 290,000 jobs. Investors want to see consistent job creation as well as regular declines in claims for jobless benefits before becoming confident that the labor market is healing.

"The initial jobless claims are still going the wrong way," said Dave Rovelli, managing director of trading at brokerage Canaccord Adams in New York.

According to preliminary calculations, the Dow fell 113.96, or 1.1 percent, to 10,782.95. The Standard & Poor's 500 index fell 14.23, or 1.2 percent, to 1,157.44, while the Nasdaq composite index fell 30.66, or 1.3 percent, to 2,394.36.

Two stocks fell for every two that rose on the New York Stock Exchange, where volume came to 1.2 billion shares, compared with 1.3 billion Wednesday.

Volume has been decreasing this week since stocks jumped on Monday on relief over Europe's nearly $1 trillion plan help debt-strapped governments in the European Union. Some analysts say that the drop in volume is a sign of flagging confidence in the market's moves.

Stocks rose Wednesday after a Commerce Department report said exports rose in March to their highest levels since late 2008.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.57 percent from 3.58 percent late Wednesday.

Gold fell, a day after setting a record high.

Crude oil fell $1.25 to $75.40 per barrel on the New York Mercantile Exchange.

European markets rose, but there is still some concern about the long-term health of the continent's economy. The euro again lost value compared to the dollar as investors remain unsure whether countries like Greece and Spain that are saddled with debt will be able to cut spending and still manage to grow.

Worries about weak economic growth across Europe have pushed the euro to a 14-month low against the dollar. The euro has lost about 12 percent of its value against the dollar since the beginning of the year.

The Russell 2000 index of smaller companies fell 6.26, or 0.9 percent, to 709.85.

Britain's FTSE 100 rose 0.9 percent, Germany's DAX index rose 1.1 percent, and France's CAC-40 slipped 0.1 percent. Japan's Nikkei stock average rose 2.2 percent following Wednesday's big gains in the U.S.

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